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China's Ministry of Land and Resources has confirmed the discovery of huge natural gas reserves in South China Sea.

 

In a circular released on Thursday, the ministry announced the discovery of natural gas reserves exceeding 100 billion cubic meters in a prospect well named LW3-1-1.

 

It may be the largest offshore natural gas discovery ever made in China, said the ministry.

 

The discovery is also one of the several great oil and gas discoveries ever made in the first six months of 2006 around the world, said Ian Cross, vice president of International Petroleum Information, IHS, a famous global technological information provider.

 

Located at the Pearl River Mouth Basin 250 kilometers from Hong Kong, LW3-1-1, drilled at a depth of 1,480 meters, is China's first deepwater well with a drilling depth of more than 1,000 meters.

 

The "important" discovery showed the huge potential reserves of oil and gas in South China Sea, the ministry said.

 

The ministry's announcement confirmed the natural gas discovery made by Canada-listed Husky Energy Inc, the operator of the prospect well.

 

Husky estimated last month that LW3-1-1, the first prospect well drilled at the production sharing contract (PSC) block with the China National Offshore Oil Corporation (CNOOC), China's largest offshore oil producer, contains a potential recoverable reserve of four to six trillion cubic feet (113 to 170 billion cubic meters) of natural gas.

 

Following the Husky news release, the China National Offshore Oil Company Limited (CNOOC Ltd), a 70.64 percent held subsidiary of CNOOC, saw a 12-percent rise of its share price on the Hong Kong Exchanges and Clearing Limited (HKEx) over two days.

 

Four days after Husky's announcement, however, a statement released by CNOOC Ltd. on the HKEx said the discovery needed further evaluation and governmental confirmation.

 

China launched its strategic exploration and appraisal of potential oil and gas reserves in the northern part of South China Sea in 2004.

 

(Xinhua News Agency July 15, 2006)