Primeline gets more time for East China Sea exploration
- Business & Finance
Primeline Energy Holdings has secured extension of exploration period for Block 33/07 in the East China Sea.
In an announcement on Tuesday, Primeline said it had signed an amendment agreement relating to the Petroleum Contract with China National Offshore Oil Corp (CNOOC). According to Primeline, the agreement was signed on October 9, 2015, to extend phase one of the exploration period from three years to 3.5 years so that it now expires on April 30, 2016.
The Petroleum Contract originally had a seven year exploration period split into three phases of three, two and two years. The amendment agreement extends the exploration period to 7.5 years with the first phase extended to 3.5 years, and the other phases remaining at two years each, Primeline has said.
In the first exploration period, the minimum work programme comprises 600 sq km of 3D seismic and two exploration wells. Primeline said it had fulfilled the seismic commitment in 2014 and is currently drilling an exploration well, LS23-1-1. The Chinese company said it expected to reach target depth by the end of October.
“The extension of the exploration period was agreed in order to provide sufficient time to complete the current exploration well and review the results and then complete a second exploration well before the end of the first exploration phase in compliance with the agreed work plan. At the end of each of the first and second exploration phases, Primeline has the right to either enter into the next phase or terminate the exploration contract. The minimum work programme for each of the second and third phases is one exploration well,” Primeline explained in its press release.
The company added that the drilling of the well LS23-1-1 had started on September 23 and was proceeding well.
According to Primeline, its drilling contractor China Oilfield Services Ltd. (COSL) has completed the drilling of 17 1/2 ” hole to 1,326m RT, set the 13 3/8″ casing and plans to start drilling the 12 1/4″ section on October 13. The well is targeting several reservoir zones in this section of the well before it reaches the designed target depth of 2,688m.
LS23-1-1 is the first exploration well in Primeline’s current two well exploration drilling campaign and is part of the rolling development program. Primeline said that, based on this well’s results, it would finalize the drilling location of the second well in Block 33/07, which will be either LS30-3-1 or LS23-2-1.
Primeline has added that any resources discovered in this drilling campaign could use or share the LS36-1 gas field production infrastructure to speed up development and optimize future development costs and economics.