By OGJ editors
HOUSTON, July 25 -- CNOOC Ltd. and Husky Energy Ltd., Calgary, produced first oil from the Wenchang offshore project in the South China Sea, where the first tanker is to call in mid-August.
The crude, similar to Indonesian Minas blend at 35° gravity and 0.08% sulfur, is likely destined for Asian markets, CNOOC said.
Peak production of 50,000 b/d is to be attained in fourth quarter 2002 and last 3 years. Production net to Husky's 40% interest is estimated at 8,000 b/d for 2002.
CNOOC operates the two fields under a development contract signed with Husky in October 2000.
Cash flow from oil sales will support exploration on the surrounding 57,000 acres on Block 39/05, where Husky is operator under a 2001 agreement, and contribute to other growth strategies nearby, said Husky. It agreed to drill as many as 3 exploration wells in 7 years, including 1 well in the first 3 years. The first well is set for 2003.
Wenchang 13-1 and 13-2 fields in the western Pearl River Mouth basin are believed to hold 83 million bbl of proved and 9 million bbl of probable reserves. Nearby pools could be developed later if proved commercial.
The two fields are 7 km apart in 120 m of water about 140 km east of Hainan Island (see map, OGJ, Dec. 17, 2001, p. 62). Oil is produced into the Nanhai Endeavour turret-moored FPSO, storage capacity 850,000 bbl.
Husky estimated a $327 million total development cost including 21 wells and $2/bbl operating cost during peak production. It put field life at 10-12 years and production downtime at 35 days/year.
