Cnooc, Husky Plan to Accelerate Development of Liwan Project

Cnooc Ltd. (883), China’s biggest offshore oil producer, and partner Husky (HSE) Energy Inc. plan to accelerate the development of the Liwan project in the South China Sea.

The companies are “confident” about the natural gas project, Cnooc Chairman Wang Yilin said at the venue of the company’s annual general meeting in Hong Kong today. A meeting yesterday with billionaire Li Ka-Shing, the single-largest shareholder in Husky, was a visit to a key partner with whom a friendly relationship is in Cnooc’s best interests, Wang said.

Cnooc and Husky, a Canadian oil company, are exploring for gas in the South China Sea. The area in Liwan, about 300 kilometers (186 miles) southeast of Hong Kong, may hold China’s biggest offshore deposit, the government said in 2006.

Wang and Yang were seen meeting with Li at Hong Kong’s Cheung Kong Center, where Li’s office is located. Li owns a 69.4 percent stake in Husky.

Commercial operations at Liwan will start in the second half of 2013, Cnooc Vice-Chairman Yang Hua said today, declining to disclose the output target. It’s too early to say if gas from the area will be supplied to Hong Kong, Yang said.

Husky holds a 49 percent stake in Liwan, while Cnooc holds the rest. Husky will operate the deepwater portion of Liwan 3-1, including drilling and developing links to a shallow-water platform. Cnooc will operate the shallow-water platform, pipelines to the shore and an onshore gas-processing plant.

To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net

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