Husky Energy increases South China Sea holdings
Posted: 8 August 2006
Husky Energy Inc. has signed three petroleum contracts with the China National Offshore Oil Corporation (CNOOC) for exploration blocks in the South China Sea, China.
The three exploration blocks cover approximately 16,871 square kilometres.
Block 29/06 is located in the Pearl River Mouth Basin adjacent to the Company's existing discovery block 29/26.
Block 29/26 contains the Liwan 3-1-1 discovery which has an estimated resource of four to six trillion cubic feet of natural gas.
Block 29/06 has an area of 9,265 square kilometres and is in water depths of 500 to 1,500 metres.
The second and third blocks, 35/18 and 50/14 are located in the Ying Ge Hai Basin, west of Hainan Island. Block 35/18 is 4,469 square kilometres in area and Block 50/14 covers 3,137 square kilometres.
Both blocks are in water depths of less than 120 metres.
“Husky is pleased to acquire these three exploration blocks in the South China Sea. The acquisition allows Husky to enhance its position and expand its exploration in natural gas prone basins, close to existing markets,” said Mr. Lau, President & Chief Executive Officer, Husky Energy Inc.
Under the terms of the petroleum contracts, Husky will drill one exploration well in each of the Ying Ge Hai blocks and two wells on the 29/06 block within the three year term.
Husky will fund 100 per cent of the exploration costs, while CNOOC retains the right to back into any future development with a 51 percent interest.
The acquisition of these exploration blocks brings Husky's total holdings to over 30,000 square kilometres of exploration acreage in the South and the East China Seas.