Husky Energy to Drill Oil Well in South China Sea

Canadian company Husky Energy will drill an oil well at a water depth of 1,500 M in the South China Sea at the end of April, reported sources with Husky on Tuesday. The well is in block 29/26, one of the 12 deepwater blocks for which the China National Offshore Oil Corporation (CNOOC) invited public bidding in 2002. Covering an area of 3,965 sq km, the contract block has a water depth between 300 and 2,000 meters. According to contract between Husky and CNOOC, the exploration will be divided into three phases. Husky will drill one well in each phase and all expenditures incurred during the exploration period will be borne by Husky. CNOOC will command up to a 51 percent interest in the event of any commercial discovery in the block. The well may be the first real deepwater well in China, said a senior manager of Husky who refused to disclose his name. As the charter for the deepwater drilling vessel of Husky was signed at the end of 2004, the daily fee was about $200,000 dollars. Now, with soaring oil prices, the current rent charge has been doubled. The drilling will be finished in 45 days. "We hope to find oil here. And if we do, more companies would come to the region," he said. The South China Sea has become a hot spot for deepwater oil exploration in recent years and the new move of Husky has attracted much attention from its rivals around the world. (Source: www.chinaview.cn)