Japan National Oil Corp. (JNOC) and China have signed a preliminary agreement for a joint venture seismic program in the Tarim basin of Northwest China.
JNOC will provide the program's 6.6 billion yen ($48.55 million) outlay, making it the first foreign operating company to conduct exploration in the region (OGJ, Feb. 25, Newsletter).
The first surveys will get under way this autumn. The extent and type of seismic coverage are not disclosed.
The program could take 4 1/2 years. JNOC plans to survey around Kashgar in the southwest part of the basin.
China's government still has not disclosed whether it will relent on its policy of not granting concessions in the Tarim basin. The Japanese press reported that although the JNOC accord is not likely to lead to a production sharing deal, Japanese companies may later obtain contract commitments for supply of Tarim crude.
The Tarim basin is regarded by some geologists as one of the world's most prospective, largely unexplored, hydrocarbon provinces. Some Chinese estimates put potential resources at 10 billion bbl of oil and 293 tcf of gas.
The role of foreign companies in the Tarim basin previously had been limited to equipment sales and technical assistance. The only onshore areas open to foreign drilling are 10 provinces and one autonomous region in southern China.
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