Petsec Energy reports FID on China oil fields

February 15, 2011 | Budget & Investment

Petsec Energy Ltd (“PSA”) is pleased to report that the Company and its joint venture partners and the Joint Management Committee which includes China National Offshore Oil Corporation Limited (“CNOOC”) have approved the Final Investment Decision (“FID”) for the development of the 6.12, 6.12 South and 12.8 West oil fields in Block 22/12, Beibu Gulf, China.

FID approval for the development of the three oil fields was announced yesterday by the operator of the Block 22/12, Beibu Gulf, China, joint venture, Roc Oil Company Limited

Independent estimated gross 2P reserves of 24 MMbbl of oil (Petsec Energy’s share: 2.94 MMbbl) will be booked for the 6.12, 6.12 South and 12.8 West oil fields development project.

The participants in the development of the 6.12, 6.12 South and 12.8 West oil fields are now:

CNOOC Limited (operator) 51.00%

Roc Oil (China) Company 19.60%

Horizon Oil (Beibu) Limited 14.70%

Petsec Energy Ltd 12.25%

Oil Australia Pty Ltd (Majuko Corp) 2.45%

The development encompasses the drilling of eleven development wells and potentially three to four exploration wells targeting potential reserves of 20 to 40 million barrels from two unmanned well head platforms at the 6.12 South and 12.8 West oil fields. These platforms will be connected by pipelines to a new CNOOC processing platform, adjacent to CNOOC’s 12.1.1 platform. The project will have access to 20,000 barrels of oil per day processing capacity from which oil will be transported through CNOOC’s 16 “pipeline 32 km to storage and export terminal at Weizhou Island.

Engineering design work and bidding for long lead equipment has begun and first oil production is expected before year end 2012.

Development capital expenditure is estimated at US$300 million. Petsec Energy share is estimated at US$37m over the period 2011 to mid 2013 of which approximately US$10 million is required in 2011. Operating costs are anticipated to be similar to CNOOC operating costs in the 12.1.1 area.