China National Oil Company Limited (CNOOC Ltd.) announced Wednesday that its partner, Husky Oil China Limited, a subsidiary of Canada-based Husky Energy Inc., has made a new deepwater gas discovery in the South China Sea.

The Liuhua34-2 finding becomes the second deepwater gas discovery following the Liwan3-1 discovery, made by CNOOC Ltd. And its partner in the Pearl River Mouth Basin in the eastern South China Sea.

The Liwan3-1 discovery was made on deepwater Block 29/26 in the South China Sea in 2006. The Liuhua34-2 discovery is also in the Block 29/26.

The discovery well Liuhua34-2-1 is located about 23 kilometers northeast of Liwan3-1 gas field. The total vertical depth of the well is 3,449 meters, and the water depth is the area is about 1,145 meters.

Test results of the well show that it produced 55 million cubic feet of natural gas per day, which indicates the well's future deliverability could exceed 140 million cubic feet per day.

Zhu Weilin, executive vice president of the CNOOC Ltd. and general manager of exploration department said that the new deepwater discovery Liuhua34-2 further demonstrates the huge potential in the deepwater area in the South China Sea.

The two adjacent discoveries could be developed in a more efficient way through sharing development facilities, said Zhu.

In order to determine the full potential of the Liuhua34-2 field, an appraisal well is planned to be drilled in early 2010 by Husky.

Husky started exploring in offshore China in 2002. Husky signed a Petroleum Contract for Block 29/26 in 2004, which is 2,230 square kilometers in area.

The Liwan3-1 natural gas field was discovered in June, 2006. Husky expects the plan of development for the Liwan3-1 Field to be submitted to the regulatory authorities in early 2010. First gas production is targeted to be in the 2013 time frame, according to the statement posted on the website of Husky Energy.

According to the production sharing contract, CNOOC Limited has the right to participate in up to 51 percent working interest in any commercial discoveries on Block 29/26.

CNOOC Ltd. is the listed subsidiary of China National Offshore Oil Corporation, China's largest offshore oil company.

Husky Energy is an integrated energy and energy-related company headquartered in Calgary, Alberta, Canada.

The concept of deepwater varies against time as probing technology develops. For the time being, deepwater refers to the area in the sea where the depths from the sea surface to the seabed are above 300 meters.

(Xinhua News Agency December 10, 2009)