Primeline Energy will enter into the second phase of the exploration period for Block 25/34 in the East China Sea and is in the last stages of finalisation of the Overall Development Plan (ODP) for Lishui 36-1 gas field.
Following the review and acceptance of the ODP technical work in late August 2009, CNOOC Research has been finalising the ODP report and preparing the supporting documentation required for government approval. The supporting documentation includes an occupational hazard assessment, a safety assessment report and an environment impact assessment (EIA).
All three reports need to be reviewed and approved by a government designated expert panel and submitted to the relevant government ministries and commissions before the ODP can be formally submitted. Primeline and CNOOC have completed the occupational hazard assessment and the safety assessment report expert review and such reports can now be submitted for approval in December.
The EIA review is planned to be held in mid December. Depending on the speed of the formal government approval for these three reports and other supporting documentation, Primeline and CNOOC aim to submit the full ODP to the National Development and Reform Commission in the first quarter of 2010. In the meantime, Primeline and CNOOC are continuing their negotiation of the Supplement Development Agreement governing the development and production operations relating to the Lishui 36-1 gas field and Primeline has been continuing its discussions with financial institutions on project finance for the development.
Primeline has also formally notified CNOOC that it has elected to enter into the second phase of the exploration period for Block 25/34. As previously agreed with CNOOC, the second phase of the exploration period will be for two years and is deemed to have commenced on 1st May 2009 with a commitment for two wells, including the one unfulfilled well commitment carried over from phase one.
Primeline is an exploration and development company focusing exclusively on China resources. The company has a 75% contractor’s interest in the petroleum contract with CNOOC for Block 25/34, an offshore exploration area of 5,221 sq km in the East China Sea, where the Lishui 36-1 discovery is located.