Chinese state-owned oil and gas giant CNOOC Ltd (0883.HK), has discovered a new reserve in the South China Sea containing over 100 million tons of oil equivalent proved in-place, the company said in a statement on Friday, March 8, 2024.

The reserve is located at CNOOC’s deep-water Kaiping South oilfield in the Pearl River Delta near Guangdong province, and contains light crude, the statement said. The discovery adds over a hundred million tons of oil equivalent proved in-place volume.

CNOOC has invested heavily in developing China’s offshore oil and gas reserves as part of a broader push to offset declining output from aging onshore fields.

During testing, the well produced an average of approximately 7,680 barrels of crude oil and 0.52 million cubic feet of natural gas per day.

The proven in-place volume of the Kaiping South Oilfield has now reached 102mt of oil equivalent through continued exploration.

CNOOC CEO and President Zhou Xinhuai said that “In recent years, CNOOC has achieved remarkable breakthroughs in oil and gas exploration in the eastern South China Sea, building a new growth pole for offshore oil and gas production. The company remains committed to oil and gas resources exploration and development in the South China Sea, thereby continuously enhancing its energy supply capacity.”

Significance of The Kaiping South Oilfield Discovery

Mr. Xu Changgui, Deputy Chief Exploration Officer of the Company, enthusiastically shared insights, highlighting the significance of the Kaiping South Oilfield discovery. He emphasized that this oilfield marks a groundbreaking achievement as China’s premier deep-water and deep-play reservoir, boasting a proven in-place volume surpassing a hundred million tons.

Mr. Xu noted that this remarkable find not only underscores the immense exploration opportunities in the deep-water South China Sea but also substantially bolsters the Company’s resource portfolio, paving the way for continued high-quality development initiatives.

Last month, CNOOC commenced production at the Suizhong 36-1/Luda 5-2 oilfield project in the Bohai Sea. For 2024, CNOOC has set a production target of 700–720mboe, with 69% coming from China and the remainder from overseas operations.

The company has budgeted 125bn–135bn yuan ($17.63bn–19.07bn) for capital expenditure in 2024, with allocations of 16% for exploration, 63% for development and 19% for production.

CNOOC Limited has made a major oilfield discovery at Kaiping South in the South China Sea, which adds over a hundred million tons of oil equivalent proved in-place volume.

The Kaiping South Oilfield is located in the eastern South China Sea, with an average water depth of approx. 500 meters. The main oil-bearing plays are Zhuhai Formation, Enping Formation and Wenchang Formation of Paleogene, and the oil property is light crude.

The discovery well, KP18-1-1d, was successfully drilled and completed at a depth of 3,462 meters, revealing an impressive total of 100.6 meters of oil and gas pay zones. Upon testing, the well demonstrated robust productivity, yielding an average output of approximately 7,680 barrels of crude oil and 0.52 million cubic feet of natural gas per day. This significant achievement underscores the immense potential of the Kaiping South Oilfield.

Furthermore, through ongoing exploration efforts, the proved in-place volume of the Kaiping South Oilfield has now reached an impressive 102 million tons of oil equivalent, solidifying its status as a substantial asset for future development and contributing to the Company’s strategic objectives for sustainable growth.