TAIPEI - Government-owned CPC Corp. is venturing into deep waters in the Taiwan Strait to search for natural gas, marking its first foray into deep-water gas exploration and production. The refiner has teamed up with Husky Energy Inc., Canada's top oil and gas producer by output, it said Tuesday.
The project--Taiwan's first deep-water gas search in domestic waters, off its southwestern coast in the South China Sea--indicates the island is working toward reducing reliance on energy imports.
Taiwan imports more than 95% of its hydrocarbon requirements. CPC produces the 5% of its needs domestically from onshore and shallow-water offshore deposits of mostly natural gas.
CPC Vice President Chen Ming-hui told Dow Jones Newswires that the Taiwanese company will have an initial 25% working interest in the field, which will double if hydrocarbon reserves of a commercially viable scale are found.
Given its relative lack of experience in deep-water prospecting, CPC will rely on the expertise of Husky, which has been drilling in Asian waters for more than a decade and owns the remainder of the joint-exploration project.
CPC signed the contract with Husky's Asian-Pacific Chief Operating Officer Robert Hinkel in Taipei around 0600 GMT, Mr. Chen said. Husky couldn't be reached for comment.
Husky holds a 40% stake in the Wencheng oil field, about 400 km southwest of Hong Kong in the South China Sea. It is also developing three natural gas fields, collectively called the Liwan Gas Project, 300 kilometers southeast of Hong Kong, jointly with CNOOC Ltd.
The Canadian company is also developing gas fields offshore Indonesia with Cnooc and Samudra Energy Ltd.
CPC is also expected to sign a 50-50 joint-venture deal with China's state-controlled China National Offshore Oil Corp, or CNOOC Group, by late 2013 to explore for natural gas in deep waters in the Taiwan Strait after failing to make significant shallow-water finds in nearly a decade of joint prospecting.
Copyright (c) 2012 Dow Jones & Company, Inc.
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