An ultra-deepwater gas field some 90 miles south of Hainan may contain more than 100 billion cubic meters of natural, according to Chinese state media reports. Reuters reports:
Offshore oil and gas specialist CNOOC Ltd announced the discovery last August after striking high flows of gas in the Lingshui 17-2 well, with per day production of 56.5 million cubic feet.The well, at operational depth of 1,500 metres under the sea, was located about 150 kilometres (94 miles) south of the Chinese island province of Hainan.The Ministry of Land & Resources has now estimated the reserves at 100 bcm, according to state television. The report said it would be one of the largest gas finds for offshore China, and would mark a breakthrough in drilling high-temperature and high-pressure reservoirs.
The Lingshui 17-2 well under discussion doesn’t lie in contested waters, but it could be a potential pressure point for regional relations going forward. With today’s oil prices at such low levels, more expensive plays like this offshore formation may be tabled for the time being—drilling down the requisite 1,500 meters in the middle of the ocean isn’t a cheap or easy undertaking. But it’s worth remembering that beyond all the posturing and regional power plays, the South China Sea contains plenty of hydrocarbons—resources that will only become more precious with time.