Block 22/12, operated by China National Offshore Oil Corporation (CNOOC), is located in the Beibu Gulf, offshore southern China. The WZ 6-12N and WZ 6-12S fields came on stream in March 2013, followed by the WZ 12-8W field, with all fifteen wells on production by August 2013. The fields are currently producing at an average rate of about 10,0000 bopd gross and have produced over 9 million barrels of oil to date.
Two additional fields within the permit have been identified for future development, with preparation of the development plan for the WZ 12-8E field due to be completed later this year, and with a planned appraisal/development well on the WZ 12-10-2 discovery scheduled to be drilled during the fourth quarter of 2015. Horizon Oil’s production entitlement is also expected to increase from 26.95% to over 35% later in the year, due to the cost recovery entitlement from past exploration expenditure.
The Petroleum Contract for Block 22/12 was awarded to Bligh Oil and Minerals (later Horizon Oil Limited) in 2001. Roc Oil farmed into the Block in 2002 to drill the WZ 6-12-1 well and also undertook operatorship.
Following the discoveries at WZ 6-12-1 and, more significantly, WZ 6-12 South in 2006, Horizon Oil and its co-venturers commenced formulating appropriate development concepts for these and the previously discovered WZ 12-8 West in consultation with the China National Offshore Oil Corporation (‘CNOOC’).
Horizon Oil’s interest in the block was initially 30% (net14.7% after backin), and on 2 June 2011 Horizon Oil announced it had signed an agreement with Petsec Energy Limited to buy Petsec’s original 25% interest, which represented a net 12.25% interest in the WZ6-12/12-8W oil fields development, thereby increasing Horizon Oil’s interest to the current net 26.95%.
At the expiry of the exploration period for Block 22/12 on 30 September 2008, the WZ 6-12, WZ 6-12S and WZ 12-8 East and West oil fields were declared development areas. The Overall Development Plan (ODP) for the W6-12 and W12-8W fields was completed in 2010 and following final CNOOC approval in January 2011, the joint venture proceeded to its Final Investment Decision in February 2011. The Environmental Impact Assessment (EIA) for the project was approved by the relevant Chinese Government Authority in February 2012, which allowed offshore development activities to commence. The final government approval required sanction of the project by the National Development and Reform Commission (NDRC) and was granted in the 4Q 2012. The ODP for the remaining WZ12-8E field is currently under way.