PetroChina to Offer Onshore Exploration Blocks

PetroChina plans to offer 18 onshore exploration and development blocks for oil and gas, mostly in the north and west, by the end of the year. Seventeen of the blocks will be for development into producing fields and enhancing oil recovery (EOR). Only one block, in the northern Ordos Basin, is for exploration. The licenses to be offered, more than earlier expectations of some 10 blocks in the Ordos Basin only, form part of PetroChina's drive to open up China's restrictive land-based upstream sector to foreign investors. CNPC, parent of PetroChina, has traditionally held most of China's onshore licenses and operates 64 percent of the country's total crude output. CNOOC, which operates offshore production, has tied up with foreign oil companies in nearly 150 product sharing contracts (PSC), while PetroChina has to date approved just over 40 with few discoveries.

PetroChina's previous licensing round was held in September 2000, when it offered 23 blocks to mostly small and medium investors. The new concessions and the 23 blocks in the previous round could eventually account for 10 percent of the company's current output of about 102 million tonnes. Estimated reserves for the 18 blocks on offer has not yet been released. The blocks are located in Ordos, Junggar and Qaidam in the north and west of the country and Songliao Basin in the northeast.