China has seen a pack of fields come onstream recently in the South China Sea, with state-owned big hitter China National Offshore Oil Corp. (CNOOC) at the front of all projects, while also enjoying exploration success in the region.

Others with strong performances include Primeline Energy, Sino Australia and Sino Gas & Energy.

In the field development sector, CNOOC reported that its Panyu 34-1/35-1/35-2 project in the South China Sea has started production. Panyu 34-1/35-1/35-2 is located in the Pearl River Mouth Basin of the South China Sea. Water depths range from 195 m to 338m (640 ft to 1,109 ft). The project consists of three gas fields: Panyu 34-1, Panyu 35-1 and Panyu 35-2. The main production facilities include one comprehensive platform, two sets of underwater production system and 13 producing wells.

There are currently two wells producing about 594.9 Mcm/d (21 MMcf/d) of natural gas. The project is expected to reach its peak production of about 4.25 MMcm/d (150 MMcf/d) in 2015.

Panyu 34-1/35-1/35-2 is operated by CNOOC with a 100% stake.

Elsewhere in the area, CNOOC brought the Huizhou 25-8/Xijiang 24-3 oil field in the Xijiang 24-1 development project offshore into production. This project is located in the Pearl River Mouth Basin of the South China Sea with an average water depth of about 100 m (328 ft). The main production facilities include two drilling and production platforms and 29 producing wells. Currently, there are four wells producing about 6,300 bbl/d of crude oil, and the project is expected to reach peak production of around 33,000 b/d in 2016.

The Huizhou 25-8/Xijiang 24-3 oil fields are a joint development project sharing one FPSO unit. This project is 100% owned by CNOOC.

CNOOC also made “a mid-sized new discovery” on the Lufeng 14-4 in the Eastern South China Sea. The Lufeng 14-4 structure is located in Lufeng Sag in the Pearl River Mouth Basin of the South China Sea with an average water depth of 145 m (476 ft). The discovery well Lufeng 14-4-1 was drilled and completed at a depth of 4,098 m (13,446 ft) and encountered oil pay zones with a total thickness of about 150 m (492 ft). The well was production tested at a rate of about 1,320 bbl/d.

“The successful exploration of Lufeng 14-4 demonstrated the company’s remarkable breakthrough in the exploration area of the Palaeogene system and further proved the huge exploration potential of the Palaeogene system in the Pearl River Mouth Basin,” CNOOC said.

CNOOC is also making progress with the LS36-1 gas field development offshore Zhejiang province. The company operates the development with 51% stake, while Primeline Petroleum Corp. has 49%.

“Development trial production, which started in July, has progressed extremely well and has averaged 23.3 MMcf/d (660.1 Mcm/d) since early September,” Primeline said.

Liaohe EOR Project

The board of Sino Australia Oil and Gas has approved an investment in a trial project with PetroChina in the Liaohe oil field in Liaoning province.

This project will use new EOR technology to produce oil from “dead wells” in the Liaohe Field where it is nearly impossible to get any more oil from these wells with conventional technology, Sino Australia said.

The company will receive as payment at least 70% of the revenue from the sale of all oil extracted from this EOR project.

Ordos Basin Production

Sino Gas & Energy reports that gas sales for the pilot testing program have been finalized and gas sales have started from the Sanjiaobei Block and Linxing Block in the Ordos Basin, Shanxi province.

Gas production has started through the Sanjiaobei central gathering station from both Linxing and Sanjiaobei pilot wells. Initial constrained production has started at about 99.2 Mcm/d (3.5 MMcf/d) from a pool of 16 pilot wells and is planned to be ramped up toward full plant capacity of 226.6 Mcm/d (8 MMcf/d) in 2015, Sino said.

“Construction on the Linxing central gathering station continues to make good progress and the facility is on track to be commissioned in mid-2015 with a capacity of around 481.6 Mcm/d (17 MMcf/d), bringing the total pilot program capacity to around 708.2 (25 MMcf/d),” Sino added. “Data from the pilot production will continue to improve the understanding of long-term reservoir performance for optimizing full field development and overall development plan submissions.”

Gas sales arrangements for the sale and purchase of gas from the Linxing and Sanjiaobei blocks have been signed with Lin County Jiahao New Energy Co., a Shanxi industrial and commercial customer, for distribution via the Yulin-Jinan regional pipeline. Under the terms of the agreements, gas will be sold from the Sanjiaobei central gathering station at initial prices of up to $9.50 per thousand standard cubic feet, along with an annual price adjustment mechanism linked to market pricing and applicable government policies.

This is a significant improvement from the $7 per thousand standard cubic feet announced June 26, 2013, as higher national gas prices feed through to the realized wellhead price.

“Achieving first gas from our Ordos Basin assets is a significant milestone and today represents a very positive inflection point in Sino’s future as we transition into a full-cycle E&P company, supplying low-cost gas to China’s rapidly growing domestic market,” Sino Gas CEO Glenn Corrie said.