Chinese oil giant CNOOC Ltd. (NYSE:CEO) has begun production at a new field in Bohai Bay, off China’s northeast coast. The new field is relatively small, producing just 4,000 barrels/day, but production is expected to reach 25,000 barrels/day by 2011. This is the first of five CNOOC projects expected to come online in Bohai Bay in 2009.
Bohai Bay is the second largest oil field in China with as much as 25 billion barrels of original oil in place, and the country has really only just begun developing the field. ConocoPhillips Corp. (NYSE:COP) has provided a good deal of the technical expertise to get the Bohai Bay fields into production, but CNOOC is expected to assume more of the operational work going forward.
This is just one small drop in the bucket. 25,000 barrels is not even enough of a fraction of a percentage of global oil demand or even Chinese oil demand. But it does lend credibility to the notion that China wants to own more and more of its own oil drilling and reserves.
CNOOC ADR’s closed at $96.40 yesterday, down about 53% from 52-week highs.
March 19, 2009