CPC Corp May Extend Exploration JV With Cnooc by Two Years

TAIPEI, May 6, 2008 (Dow Jones Newswires)

Taiwan government-owned CPC Corp. may extend its Taiwan Strait exploration joint venture with China's Cnooc Ltd. (CEO) by two years from the end of 2008, a senior CPC official said Tuesday.

Cooperation between CPC and Cnooc has been put on hold since 2006 because of tensions between Taipei and Beijing, but the election in March of more China-friendly Ma Ying-jeou as Taiwan's president offers a chance for better ties between CPC and China's oil companies.

CPC and Cnooc plan to start talks on the extension of their exploration cooperation in July or August, the official said.

CPC also plans to spend between US$10 million and US$20 million to drill the second of three exploration wells in the Tainan Basin, the location of the joint venture in the Taiwan Strait, said the official, who declined to be named.

The Tainan Basin 50-50 exploration joint venture was signed in May 2002 and was extended once from 2006 until the end of 2008. No oil was found in the first well.

The official declined to say when the companies would start drilling the second well or how much oil it is estimated to hold.

"We need to carefully evaluate the entire area (Taiwan Strait), whether there are places with more potential (for oil)," he said.

The Economic Daily News Tuesday cited CPC Chairman Wenent Pan as saying that drilling of the second well in the Tainan Basin will start late May or early June.

But the official said it's "very possible" that the two companies may also revive exploration in the Nanjih Islands Basin, also in the Taiwan Strait.

CPC and Cnooc signed an agreement on forming a joint venture for exploration in the Nanjih Islands Basin, also known as the Nanri Dao Basin, in August 2002, but the venture was put on hold as the Taiwan government didn't approve it, the official said. The venture didn't proceed beyond the initial evaluation stage.

TAIPEI, May 6, 2008 (Dow Jones Newswires)