CNOOC Purchases Xihu Trough
CNOOC Limited announced that the Company's board has approved an agreement reached with CNOOC, its parent, on the acquisition of CNOOC's working interests in the Xihu Trough in the East China Sea of the PRC for a total consideration of US $45 million pending regulatory approval from the Chinese government. CNOOC Limited plans to acquire the asset through its wholly-owned subsidiary, CNOOC China Limited. After the acquisition, CNOOC Limited will be the operator of this asset.
"This is a significant acquisition by CNOOC Limited. We are acquiring not only the existing oil and gas reserves but also upside exploration potential in the area. We are looking forward to a quick kick-off of the development work," commented Dr. Mark Qiu, Chief Financial Officer and Senior Vice President of the Company. "We can expect attractive returns from this asset."
The Xihu Trough is in the East China Sea, 250 kilometers east of Shanghai, in the area where China Petroleum and Chemical Corporation, or Sinopec Corp., made four major natural gas discoveries through independent exploration. It estimates that the findings contain at least 1,487 billion cubic feet of natural gas and 42.6 million barrels of liquid. CNOOC received 50% carried interests in the area from the government and two parties agreed to develop the fields jointly with CNOOC as the operator in an earlier agreement. Post acquisition, CNOOC Limited is expected to receive all commercial rights and interests attributable to CNOOC.
"We are happy with the agreement. It establishes for CNOOC Limited an important future natural gas producing base in an area thirsty for more clean energy," said Mr. Wei Liucheng, the chairman and Chief Executive Officer of the Company." It will be good for the development to have CNOOC Limited as owner and operator."