By Wang Yu (China Daily)
Updated: 2007-08-30 09:41

China's top offshore oil and gas producer is to invest 10 to 15 billion yuan to enhance deep-sea drilling capability by building relevant equipment, a senior executive confirmed yesterday.

Relevant high-end gears will make up a "complete" deep-sea exploration and production fleet, which consists of drilling rigs, exploration and pipe-installing vessels, according to Zhou Shouwei, vice-president of China National Offshore Oil Corporation, or CNOOC.

Related readings:  CNOOC delves deeper into the sea  CNOOC plans heavy oil petrochemical projects  CNOOC eyes overseas oil, gas assets Special Coverage: Markets Watch

The executive added that the planned deep-sea equipment would be capable of operating at 3,000 meters under water and drilling up to 10,000 meters under the seabed.

"Deep-sea areas boast larger potential both in China and elsewhere That's why we should spare no effort tapping the segment," Zhou said.

Zhou also said a manufacturing site for deep-sea gears is under construction in Qingdao, which is supposed to build most of CNOOC's own deep-sea drilling facilities.

He also said a deep-sea exploration experimental project is under preparation, and is expected to be carried out at the end of October or early November.

In another development yesterday, Hong Kong-listed CNOOC Ltd announced it has made a major discovery in Bohai Bay.

Fu Chengyu, chairman of CNOOC Ltd, said that based on the current geological features of the Jinzhou 251 Oilfield, it is very likely for the field to have more reserves of light oil. "Our Bohai assets used to feature heavy oil reserves. The discovery this time is light oil, which is a breakthrough."

Another positive news for CNOOC Ltd is that Liuhua 11-1 Oilfield, which suspended its production after typhoon Chan Chu struck, has resumed production since June 27. All its 25 wells are on stream, rolling out 23,000 barrels of crude oil per day.

The resumption in production will boost CNOOC's output this year, analysts say. In its interim report released yesterday, CNOOC said it produced 85.4 million barrels of oil equivalent, up 4.5 percent year-on-year.

Because of the low oil price during the first five months of this year, the company witnessed its sales and net profit drop by 6.4 and 10.6 percent respectively year-on-year in the first half of the year.

But a rebound in oil prices after May will help boost CNOOC's financial performance during the second half of this year, some analysts have predicted.