China starts drilling oil in S China Sea

BEIJING - China's first deep-water drilling rig started operations in the South China Sea at 9:38 am on Wednesday, marking "a substantial step" made by the country's deep-sea oil industry.

The sixth-generation semi-submersible CNOOC 981, owned by China National Offshore Oil Corp (CNOOC), began drilling in a sea area 320 km southeast of Hong Kong at a water depth of 1,500 meters.

It is the first independent deep-water oil drilling to be conducted by a Chinese company, and China is the first country to explore deep-water oil and gas resources in the South China Sea.

"Large deep-water drilling rigs are our mobile national territory and strategic weapon for promoting the development of the country's offshore oil industry," said CNOOC Chairman Wang Yilin, adding that the drilling would contribute to ensuring the country's energy security and sovereign right over territorial waters.

Wednesday's drilling is the first step for oil and gas exploration in the 25-square-km deep-water region. The rig will complete drilling at a depth of 2,335 meters to reach an estimated 30 billion cubic meters of natural gas, said Shi Hesheng, a geological engineer with CNOOC's Shenzhen subsidiary.

"In a long-term vision, more than 700 million tons of oil resources and 1.2 trillion cubic meters of natural gas resources will be found in this area. There are a dozen such areas in the northern part of the South China Sea," Shi said.

Depths greater than 300 meters are internationally recognized as deep waters and those greater than 1,500 meters are ultra-deep waters. Globally, 30 to 40 percent of marine resources are buried in deep waters and about half of major exploration sites are developed offshore.

The South China Sea is estimated to have 23 billion tons to 30 billion tons of oil and 16 trillion cubic meters of natural gas, accounting for one-third of China's total oil and gas resources.

About 70 percent of oil and gas reserves in the resource-rich South China Sea is contained in 1.54 million square km of deep-water regions.

"The South China Sea has the potential to become the world's fourth-largest deep-water drilling region, after the so-called 'Golden Triangle' of the Gulf of Mexico, Brazil and West Africa," said Zhou Shouwei, a member of Chinese Academy of Engineering.

Subject to a lack of key technologies, most of China's current offshore oil exploration is conducted less than 300 meters below the surface.

The drilling at CNOOC 981 is a historic milestone in the country's deep-water oil and gas exploration efforts, said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

"It will reduce China's oil imports and boost the development of the country's deep-water exploration technologies and equipment," Lin said.

Oil and gas consumption has soared in China amid the country's rapid economic growth and industrialization process. The country relies on imports for more than 55 percent of crude oil and 20 percent of natural gas. Its appetite is expected to grow in the future.

To ease mounting pressure, China has invested huge human and material resources to move its oil drilling into deep waters.

It took 6 billion yuan ($952 million) and more than three years for China State Shipbuilding Corp (CSSC), the contractor, to build the CNOOC 981 rig for CNOOC.

The platform is 114 meters long, 90 meters wide and 137.8 meters high, and weighs 31,000 tons. With a deck the size of a standard football field, the rig is capable of undertaking an offshore operation at a maximum water depth of 3,000 meters and drilling a depth of 12,000 meters, according to CSSC.

Equipped with third-generation dynamic and global positioning systems, the CNOOC 981 can withstand vibrations brought by "once-in-two-centuries storms." Its underwater blow-out prevention system can efficiently prevent accidents like the 2010 BP oil spill in the Gulf of Mexico, experts said.