Phillips begins production from second China field

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October 30, 1995

Petroleum International Corporation Asia and its co-venturers — China National Offshore Oil Corp. and its regional organization, China National Offshore Oil Nanhai East Corp; and the Shell offshore China partnership (Pecten Orient Company and Shell Exploration [China] Limited) — recently commemorated the startup of oil production from the second platform in the Xijiang project with a ceremony here.

The event marked the first production from the Xijiang 30-2 platform in the South China Sea. Initial production of 20,000 barrels a day is expected to peak at 60,000 barrels a day within two years.

Total oil production from the Xijiang 24-3 and 30-2 fields is expected to increase to a peak rate of 100,000 barrels a day by year-end 1996.

Jim Mulva, Phillips Petroleum Company's president and chief operating officer, participated in the dedication ceremony, along with Wang Yan, president of China National Offshore Oil Corp., and John Kilroe, chairman and chief executive officer of Shell Companies in China and Hong Kong.

"The Xijiang project demonstrates the great value of international cooperation," said Mulva. "Production from these fields is helping fuel China's growing economy and is providing a boost to Phillips' and Pecten/Shell's worldwide operations."

Crews completed installation of the 30-2 platform in May, and drilling commenced in July. The 24-3 platform was installed and began production last year, reaching a peak of nearly 75,000 barrels a day.

Phillips and its co-venturers have invested $600 million in the Xijiang project.

Oil flows through pipelines laid on the sea floor to a floating processing, storing and offloading (FPSO) unit located between the two platforms, which are about 8 miles apart. The FPSO, a modified tanker named the Nanhai Kai Tuo, holds 1 million barrels of oil and enables shuttle tankers to transport the oil to refineries in China. The Xijiang fields are located 80 miles southeast of Hong Kong in the South China Sea in 330 feet of water.

Phillips and Pecten began their search for oil in the South China Sea in 1984 and discovered the Xijiang 24-3 field in 1985. Discovery of the Xijiang 30-2 field followed in 1988. In 1992, Phillips, Pecten and Chinese officials signed an agreement to develop the two fields.

Phillips Petroleum International Corporation Asia is a unit of Phillips Petroleum Company.

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