COSL to Drill 2 Wells for Primeline in Block 33/07 Offshore China for $20M
China-focused Primeline Energy Holdings Inc. signed a Letter of Intent (LOI), valued at $20 million, Tuesday with China Oilfield Services Ltd. (COSL) for the latter to undertake drilling operations in an upcoming exploration program in Block 33/07 in the East China Sea, the firm said Thursday.
Under the LOI, which is subject to a final contract, COSL will commence drilling of two wells in August. The first well will be LS23-1-1, while the second will be selected from two prospects following an evaluation of the results of the first well. The total drilling costs exclude costs for any test if oil and gas are discovered.
The exploration drilling program marks the beginning of a rolling development strategy by Primeline now that the production infrastructure hub and access to gas market has been established and LS36-1 field has been in production. Primeline hopes to find more hydrocarbons to capitalize on the infrastructure hub and the access to market, which enable future discovery in the area to be quickly and cost effectively developed.
"The rig market has proved favorable with good availability of suitable rigs and competitive prices. With the completion of the 3D seismic data interpretation, the selection of drilling locations was completed in the past few weeks and locations have been agreed and approved by the joint management committee established by CNOOC and Primeline under the petroleum contract for Block 33/07," Primeline said in the press release.
China National Offshore Oil Corp. (CNOOC) has the option of taking a 51 percent stake in Block 33/07 in the event of a commercial development.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- China's COSL Completes 3D Seismic Ops in North Barents Sea (Aug 10)
- COSL Completes its First Exploration Assignment in the Far East (Aug 08)
- COSL Appoints Qi Meisheng as CEO and President, Replaces Li Yong (Jun 16)
Company: CNOOC more info
- CNOOC 3Q Revenue Rises; Only Halfway To 2017 Spending Goal (Oct 25)
- CNOOC Completes Test Runs at Huizhou Refinery in Guangdong - Report (Oct 09)
- Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
Company: Primeline Energy Holdings Inc. more info
- Primeline to Commence Arbitration Against CNOOC Over China's Offshore Block (May 25)
- Primeline Enters into Phase 2 Exploration of Block 33/07 in East China Sea (May 05)
- Primeline Begins Arbitration Over Zhejiang Gas' Breach of Sales Contract (Apr 18)