China Oilfield Services buys rig to expand deepwater exploration capacity

10/10/2012

China Oilfield Services buys rig to expand deepwater exploration capacity

BY YVONNE LEE

HONG KONG -- China Oilfield Services, the drilling arm of China National Offshore, said that it has bought a secondhand deepwater semisubmersible rig in a move to expand its deepwater drilling capacity to support its parent company's ambitious oil and gas growth targets.

The Beijing based company didn't provide any financial details on the deal but said the rig can operate at a depth of 4,600 ft and is expected to start drilling operations offshore China by the end of this year.

China Oilfield Services is the leading oil field services provider in the offshore Chinese market. Most of the company's rigs have been used for oil and gas discoveries made by Cnooc, a subsidiary of China National Offshore, or by foreign operators through Cnooc profit sharing contracts.

As part of efforts to locate more domestic oil and gas reserves, Cnooc. has taken steps to become independent in deepwater exploration and production after previously relying on foreign skills and technology. Cnooc. in May started operating its first deepwater semisubmersible drilling rig, HYSY 981, which is capable of drilling to a depth of 3,000 m.

With slower oil and gas output growth after 2010, Cnooc. needs to develop remote deepwater areas to help feed China's heavy energy demand.

Cnooc. has targeted its oil and gas output to grow at a compound annual rate of 6%-10% between 2011 and 2015, down slightly from 7%-11% for 2005-2010.

Dow Jones Newswires

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