BP, Anadarko Plan New Offshore Gas Project in South China Sea

February 15th, 2012 by Trefis Team
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BP (NYSE:BP), hit by falling output, is looking to begin exploration in blocks in the South China Sea. BP has a strategic focus on deepwater resources around the world. The company received approval to begin exploration in a block in the South China Sea last week. [1] BP will be exploring the 43/11 block in collaboration with Chinese player CNOOC and the independent exploration player Anadarko Corp. (NYSE:APC). Deepwater exploration is becoming an increasingly important source of new reserves for major oil companies.

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China push

The agreement between BP and the Chinese government to begin exploration of the 43/11 block was signed last year during Vice-Premier Li Keqiang’s visit to the UK in January last year. [1] The South China Sea is expected to hold vast deepwater reserves of oil and gas. BP China’s president Chen Liming hoped that drilling would begin by the end of this year although cautioning that the exact date to start the work depended on a number of factors. BP already operates a gas production field in China called the Yacheng field and also holds interest in another deepwater block in the South China Sea.

BP will hold a 40.82% interest in the 43/11 block exploration project and will be the working partner. Independent player Anadarko holds 50% stake, while the rest will be held by state player CNOOC. [1] The venture will look to explore the block for natural gas and then take up further development. BP is focusing on deepwater exploration in the U.S. Gulf of Mexico and Angola among other places to boost output figures. China is expected to boost its consumption of natural gas over the next few years to meet growing energy needs and to supplement coal as a cleaner alternative.

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Notes:
  1. BP hopes to drill new S.China Sea gas block this yr, Reuters [↩] [↩] [↩]