ROC To Buy Apache’s China Assets

abarrelfullabarrelfull wrote on 31 Aug 2014 19:22

Latest News

{"module":"feed\/FeedModule","params":{"src":"http:\/\/\/feed\/pages\/pagename\/blog%3A_start\/category\/blog\/limit\/10\/t\/My+Blog","limit":"4","module_body":"* %%linked_title%%"}}
  • Want a weekly review of refining news?

27 June 2006

ROC has agreed to acquire a 24.5% operated interest in the Zhao Dong Block ("the Block") in the Bohai Bay, offshore China, for a cash consideration of US$260 million/A$354 million. The acquisition is via the purchase of 100% of the shares of Apache China Corporation LDC ("ACC") a wholly owned subsidiary of the US$20 billion/A$27 billion Apache Corporation ("Apache"), headquartered in Houston.

The Block is part of a prolific producing petroleum province which offers considerable upside potential. Gross production from the two producing fields in the Block is in the order of 30,000 barrels of oil per day ("BOPD") (net ACC working interest: 7,300 BOPD) and gross proved and probable remaining reserves are approximately 61 MMBO (net ACC working interest: 15 MMBO).

The Block, which covers 27.5 sq kms, is located in very shallow water close to shore in the Bohai Bay, offshore China, approximately 200 km southeast of Beijing (Attachment 1).

Within the Block there are two producing oil fields (C and D) and part of a third field (C4) which is due to be developed in 2007 and come on to production in 2008. ACC operates the planned C4 development in which it has an 11.575% unitised interest.

Since production commenced in 2003, towards 20 MMBO has been produced from the C and D fields and there is an estimated 61 MMBO of gross proved and probable reserves yet to be produced. Production, which is currently through 26 wells, will be augmented by a multi-well drilling programme, targeting appraisal, development, extended reach and close-in exploration opportunities, which is underway and expected to continue over the next several years. Operating, development and drilling costs are reasonable, partly because of the facilities' proximity to shore and the size and established nature of the operation which provides economies of scale.

The offshore facilities comprise two, bridge-linked platforms, one of which is dedicated to drilling and accommodation while the other is used for production and processing. An integral part of the oil production operation is the simultaneous production of a significant amount of associated water which is reinjected into the reservoir. The facilities have been designed accordingly, with 12 water injectors and four water source wells supporting the current oil production.

An indication of the quality of the petroleum system is provided by the fact that, within the Block, 27 different stratigraphic levels, ranging in age from Palaeozoic to Tertiary, are known to contain oil. Sixteen of these stratigraphic intervals are currently productive. Between 1994 and first production, 11 exploration wells were drilled in the Block of which eight (73%) encountered significant oil. Reservoir quality is good to excellent, particularly in the shallower parts of the section where permeabilities are measured in Darcys and porosities range above 30%. The source rock is rich and generative. Oil gravities range from 18° to 38° API with the higher gravity (lighter) oil being in the deeper part of the section. The oil, which is waxy with a low pour point and a low acid content is currently sold into the export market. Zhao Dong oil bears comparison with Indonesian Duri crude which recently traded at a discount of approximately US$5.50/bbl to West Texas

The Block is administered under the terms of a standard Petroleum Sharing Contract the other parties to which are PetroChina Company Limited (51%) and New XCL-China, LLC (24.5%).

Related News

{"module":"feed\/FeedModule","params":{"src":"http:\/\/\/feed\/pages\/pagename\/blog%3A_start\/tag\/upstream\/category\/blog\/limit\/10\/t\/My+Blog","limit":"3","module_body":"* %%linked_title%%"}}

Looking for information on the E&P sector?

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License