Husky Energy has posted a deepwater natural gas discovery in the South China Sea it estimates has recoverable resources of 4 Tcf to 6 Tcf -- easily the largest in its history and more than all its proven holdings in Western Canada.

The Canadian integrated company believes the single well could "potentially double" Husky's current Western Canadian proved gas reserves of 2.136 Tcf and its 2P resources of 2.7 Tcf, spokesman Colin Luciuk told Platts June 15.

He said Husky believed it was "targeting a large structure" and the results amount to a "world-class find."

Evaluations

The well results are being evaluated and further drilling is anticipated after 3-D data is reviewed before Husky and China National Offshore Oil Corp (CNOOC) can determine what capital investment will be needed to bring the gas to market, Husky said.

Luciuk said it will likely take a "few years" to define the find and gather the data needed before production can start.

He said delineation wells will be drilled to get a precise measure of the reserves, with further drilling dependent on an evaluation of 3-D data and rig availability.

Once the gas comes on stream, Luciuk said it will probably be delivered to markets in Hong Kong or China.

Husky has been collaborating since 2002 to explore offshore China with CNOOC, which has rights to a 51% working interest in any discoveries.

The Liwan 3-1-1 well on Block 29/26, 150 miles south of Hong Kong, was drilled by the Transocean Discovered D-534 drillship and completed on existing 2-D seismic data to a total depth of about 12,605 feet. It encountered 184 feet of net gas pay over two zones.

Deepest water well

The well was the first deepwater find in the Pearl River Mouth Basin and the deepest water well drilled offshore China, opening up a new hydrocarbon province.

Block 29/26 is one of three that Husky holds in the South China Sea and are part of a production-sharing agreement signed 10 months ago.

Husky has produced 13,500 b/d net from the nearby Wenchang oil field, which achieved payback in only nine months, Luciuk said.

The gas find "increases our presence in the South China Sea and firms up a core area," he said.

But Husky has no plans to divert any resources from Canada, where its Tucker and Sunrise oil sands projects and offshore Newfoundland, are key elements of its program.

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.