CNOOC Ltd. (CEO), one of the three oil companies in China and the country’s largest offshore oil explorer, intends to double its production in the western South China Sea. The company said production from this area may touch 20 million cubic meters by 2015 from 10 million cubic meters in 2008.
 
Western South China Sea is an important area where the company’s oil and gas properties are located. Other major production areas in offshore China are Bohai Bay, eastern South China Sea and the East China Sea. Approximately 24% of the company’s total year-end 2008 proved reserves were located in the western South China Sea.
 
China’s increased energy demand is prompting the company to intensify exploration activity in this region. The company plans to work with foreign partners to drill the first deepwater wells in this area next year. CNOOC is the only company permitted to conduct exploration and production activities with international oil and gas companies off China’s shore.
 
There is huge potential in the deepwater blocks in the South China Sea, most of which are expected to hold natural gas resources. A potentially lucrative growth area for CNOOC is its natural gas business, which is expected to witness strong growth in the coming years due to China’s transition from coal to natural gas.
 
The western part of the South China Sea is an important natural-gas producing area for the company. It continues to invest heavily in exploration and development activities in this region. CNOOC and its partners are planning to invest nearly $29 billion through 2020 to develop energy reserves in the South China Sea.
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