CNOOC grants extension to Empyrean for Chinese block exploration
Due to the coronavirus pandemic, Empyrean Energy has been granted a twelve-month extension for the first phase of the exploration period on Block 29/11, offshore China.
Empyrean said on Wednesday that, due to the COVID-19 pandemic and the resultant global control policies, it proactively engaged with the China National Offshore Oil Corporation (CNOOC) and applied for the extension.
The company added that the twelve-month extension for the first phase of exploration was granted by the CNOOC.
As a result, the first phase of the exploration period for the petroleum contract in the block was extended until 12 June 2022. CNOOC informed Empyrean that the current contract will be suitably amended in due course.
The exploration commitment for the first phase of exploration is to drill an exploration well. Empyrean said it is taking all necessary steps for safely drilling the first exploration well on Block 29/11 as soon as practicable.
The initial petroleum contract came into effect on 13 December 2018 and, under the deal, one exploration well was supposed to be drilled during a 2.5 year period.
Empyrean CEO, Tom Kelly, said: “This 12-month extension is a further example of the excellent cooperation and understanding between CNOOC and Empyrean.
“The extension provides enormous de-risking and flexibility with respect to the planning and drilling of the first phase exploration well in Block 29/11 without having to invoke force majeure. COVID-19 has made many operations unsafe and uncertain, especially travel, and this extension provides the flexibility for a much safer approach to our operations.
“It is Empyrean’s intention to drill this first exploration well as soon as practicable and we continue to take proactive steps towards a safe drilling operation in China. Put simply, if we can safely drill this first well ahead of the new extension – we will“.
As for the block, 29/11 is a large block – 1,806 square kilometres – located in the prolific Pearl River Mouth Basin, offshore China, some 200 kilometres southeast of Hong Kong.
Empyrean is the operator with a 100 per cent of the exploration rights of the permit during the exploration phase of the project. In the event of a commercial discovery, the CNOOC will have a back in right to 51 per cent of the permit.
Three prospects are identified in the block – Jade, Topaz, and Pearl. Total mean oil in place estimates on the three prospects are 884 mmbbl.
It is worth noting that recent results from a seismic inversion analysis for Empyrean’s Jade and Topaz prospects gave Empyrean confidence it has a world-class carbonate reservoir with excellent porosity and permeability at both prospects.