China May Reopen Deep-Sea Oil Hunt

BEIJING — A major gas discovery deep under the South China Sea could reopen a frontier for oil and gas exploration that some multinational companies abandoned decades ago after shallower wells turned up dry, said the chairman of Cnooc Ltd., China’s biggest offshore oil producer.

The discovery, announced in June by Cnooc’s Canadian partner, Husky Energy Inc., is a “tremendous breakthrough for us,” Fu Chengyu said in an interview Tuesday.

The statement was the first time that Cnooc, the listed arm of China National Offshore Oil Corp., has made clear how important it thinks the field could be. Cnooc has the option to buy a 51 percent stake in the field.

Husky, controlled by Hong Kong billionaire Li Ka-shing, said the field, China’s first deep-water discovery, is about 150 miles south of Hong Kong beneath 4,500 feet of water. Husky estimates that it contains 4 trillion to 6 trillion cubic feet of recoverable natural gas.

Wall St. Journal