Burlington Gets Okay to Develop China's Bajiaochang Gas Fld

Burlington Resources reported that its subsidiary, Burlington Resources China LLC, has received official approval from China's State Development and Reform Commission to develop the Bajiaochang Gas Field in Sichuan Province.

Burlington will develop the first of a series of natural gas accumulations in the field, which lies on the Chuanzhong Block near the town of Shehong, approximately 100 miles northeast of the city of Chengdu. Burlington serves as the project's operator and holds 100 percent of contractor's working interest in a production sharing contract on the block. As a partner, China National Petroleum Corp. (CNPC) participates in revenue and production through the contract. Burlington and PetroChina Company Limited, an affiliate of CNPC, had previously signed a long-term Natural Gas Purchase and Sales Agreement.

"We are pleased and proud to begin the development of natural gas in onshore China," said Bobby S. Shackouls, Burlington Resources chairman, president and chief executive officer, speaking at a ceremony marking the occasion in Beijing. "This is one of the strategic areas that offers Burlington growth potential for the second half of this decade, and we look forward to producing rising volumes of natural gas for the people of China. We thank CNPC and PetroChina as well as the State Development and Reform Commission for their cooperation and support."

The development program will commence immediately. A large accumulation of natural gas has been confirmed on the block through the drilling of six appraisal wells and recompletions of four existing wells. The 1,700-square-mile block features tight producing formations, a type of geology Burlington has proven highly adept at exploiting throughout the U.S. and Canada by utilizing hydraulic fracturing and other stimulation techniques. Burlington is also an interest holder in the Panyu Project, which began producing oil from the South China Sea during 2003.