RH Petrogas Receives Nod from CNPC for Onshore Fuyu-1 Development

Singapore's RH Petrogas (RHP) said Wednesday that it has received approval from China National Petroleum Corporation (CNPC) for its revised Overall Development Plan (ODP) pertaining to the phased development of Fuyu-1 Block in the onshore Songliao Basin, Jilin. 

CNPC will submit the ODP for final government approval from the National Development and Reform Commission (NDRC) and the approval is expected to be obtained in 4Q 2012, RHP said. 
Field development and commercial production will start immediately after the NDRC gives the green light, RHP added. 
A revised ODP proposing the phased development was submitted to CNPC in December 2011, RHP said in its 2011 annual report. The company stated in its report that a 3-well pilot production test was carried out on the block with modifications in down-hole equipment and steam injection parameters while it was awaiting approval from CNPC. The company also drilled a deep well – JF001 – to ascertain the deeper potential of the block. JF001 was drilled to a depth of 7,454 feet (2,272 meters) and the well encountered 98 feet (30 meters) of net gas pay from four sands in the Lower Cretaceous section.  
"We are very pleased to receive the approval of the revised ODP from CNPC, which represents a significant milestone for the group. We are now one final step away from commercial production of oil and gas at the Fuyu-1 Block," the company's CEO Tony Tan said in a statement. 
 The company operates the Fuyu-1 production sharing contract (PSC) through its subsidiary Kingworld Resources Limited (KRL). 
The PSC is located in the southern fringe of the prolific Songliao Basin in northeast China where the Daqing Field is located. The Yongping Field within the PSC was zoned for development after the Chinese government sanctioned the field’s reserves in 2009. The Yongping Field produces heavy crude oil from shallow reservoirs which requires thermal recovery. A total of 98 shallow wells have been drilled in the PSC by KRL with interpreted pays in most of the wells.
"The wells drilled since 2011 are just pilot-testing wells. The drilling of commercial wells can only start after the NDRC give us an official approval," a spokesperson representing RHP told Rigzone through a telephone interview. 
The spokesperson declined to reveal the number of wells that RHP plans to drill after it receives approval from the NDRC to proceed.