US firms are gearing up to bid for oil exploration projects in the South China Sea area, China National Offshore Oil Corp (CNOOC) said on Tuesday.
CNOOC chairman Wang Yilin said the US is ‘displaying interest’ in the area’s oil and gas projects, in addition to Malaysia and Thailand, where a number of companies have also set eyes on the auction.
The firm is China’s largest offshore oil producer and third largest oil company. In the first quarter of 2012, it registered a net production of 79.8 million barrels of oil equivalent and an O&G sales revenue of approximately USD 7.73bn. It plans to invest USD 32 billion in exploring its South China Sea blocks over the next 20 years and up its oil and gas output to 120 million barrels tons of oil equivalent by 2020
CNOOC last month sought partnerships to develop nine offshore blocks in the South China Sea, seven located in the Zhongjianan Basin and the remainder in the Wan’an and Nanweixi basins. The blocks cover over 160,000 square km and have a water depth between 300-4000m, according to CNOOC.
China offshore resources are mainly located in the Bohai Bay region, the East China Sea and the South China Sea. With 7.7 billion barrels of proven oil reserves, the South China Sea is one of the world’s largest reservoirs of oil and gas resources, second only to the Gulf of Mexico, West Africa and Brazil.
The country’s development of drilling technology is an indication that it is catching up to major oil giants, analysts said. The development of offshore energy resources will reduce China’s dependence on oil imports, a large proportion of which come from Iran.