Husky Oil, CNOOC make 'significant' gas discovery in South China Sea

Husky Oil has made its third ‘significant’ gas discovery on Block 29/26 in the deepwaters of the South China Sea.

Drilled by the West Hercules semisubmersible to a total depth of 3,331 meters, the deepwater Liuhua 29-1 exploration well encountered a gross gas column of 145 meters. The discovery showed a significant thickness of high-quality gas-charged reservoir, as well as an oil zone in a deeper reservoir.

Tests of the Liuhua 29-1 discovery well flowed natural gas at a rate of 57 million cubic feet per day through restrictive equipment, indicating that daily production levels could reach 90 million cubic feet a day in the future.

“The exploration discovery at Liuhua 29-1 is the third significant gas discovery in Block 29/26,” said Johan C.S. Lau, president and CEO of Husky Energy. “The three natural gas fields, Liwan 3-1, Liuhua 34-2 and Liuhua 29-1, have confirmed the resource potential as a major gas development project in the South China Sea and supports an earlier estimation of petroleum initially in place of 4 to 6 trillion cubic feet for the block.”

Liuhua 29-1 is located in the Pearl River Mouth Basin in the Eastern South China Sea. Situated in waters measuring 720 meters deep, the Liuhua 29-1 discovery well is located 43 kilometers northeast of the Liwan 3-1 gas field and 20 kilometers northeast of the LH 34-2 gas field.

Obtained in 2004, Husky currently holds 40 percent interest in Block 29/26 in the South China Sea. Under the Petroleum Contract, CNOOC has the right to participate in any field development projects for up to 51 percent interest.

South China Sea Field Development

With the Front End Engineering and Design (FEED) completed on the Liwan 3-1 Deepwater Project, the development plan for the project should be submitted to the regulatory authorities by early 2010.

Most likely, the Liwan 3-1 natural gas field will be developed parallel to the Liuhua 34-2 natural gas field, with first production from both fields anticipated in 2013.

The most recent discovery on the block, the Liuhua 29-1 field will be appraised later this year to better define the size of the natural gas field. Once appraised, Liuhua 29-1 will be developed using the infrastructure established for Liwan 3-1 and Liuhua 34-2.

Now, the West Hercules deepwater semisubmersible drilling rig is currently preparing to spud the first delineation well on the Liuhua 34-2 discovery.

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