Stormy seas ahead in China's hunt for offshore oil

business-times.asia1.com.sg :

China has identified its seabeds as the next frontier in the search for the energy it needs to fuel growth. China's crude output is expected to be 3.7 million barrels per day (bpd) this year, against demand forecast at nearly 7 million bpd, prompting state firms to hunt for oilfield assets around the world.

Canada-based Husky Energy Inc, which has a joint venture with CNOOC, had announced China's first deep-water find, a bumper reserve it said to be larger than 2 years of total national production. But shortly after that, CNOOC issued a warning that total reserves have yet to be ascertained, underlining other questions that still cloud Beijing's optimism.

Some of the most promising areas are off limits anyway. Japan and China's already tense relationship has been worsened by arguments over who owns the title to gas near their maritime boundary in the East China Sea. And parts of the nearby Spratly islands are claimed by China, Taiwan, Vietnam, Malaysia, Brunei and the Philippines, meaning there are political limits to solo drilling.

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