Canada's Husky Energy Inc has discovered a significant deepwater gas reserve
with its Chinese partner, China National Offshore Oil Corp (CNOOC), in the South
China Sea near Hong Kong.
Based on preliminary analysis of drilling results, the discovery could
contain a potential recoverable resource of four to six trillion cubic feet (120
billion to 180 billion cubic meters) of natural gas, the energy company said in
a statement seen Friday.
"We are very pleased with our exploration results and this discovery confirms
our confidence in the significant undiscovered hydrocarbon potential in the
South China Sea," John Lau, Husky CEO and president said.
"We look forward to evaluating this discovery and continuing our exploration
efforts in China."
State-owned CNOOC has the right to participate in the development of any
discovery for up to 51 percent working interest, Husky said.
The Hong Kong-listed unit of CNOOC, CNOOC Ltd, confirmed the discovery, with
an official saying that if the estimated recoverable reserves were confirmed,
the block could be the "largest gas find in offshore China."
The discovery was made in the mouth of the Pearl River about 250 kilometers
south of Hong Kong, it added.
The well will be sidetracked for further evaluation of the pay zone, Husky
said, adding there were plans for a three-dimensional seismic survey to assess a
number of similar structures which have been identified from other seismic
Earlier this month, CNOOC signed two production sharing contracts with
Britain's BG Group PLC covering two deep water blocks in the South China
To date, CNOOC has signed four deep water production contracts with foreign
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