It said the foreign firms decided to forego the option in the next phase of participation due to a failure to agree on the existing development plan.
Shell, Unocal, CNOOC and Sinopec had agreed last year to explore, develop and market natural gas, oil and condensate in the East China Sea. The agreement covered three exploration and two development contract areas in the trough.
According to CNOOC Ltd Chairman and CEO Fu Chengyu, “We are confident about the project’s future [and] the change of partners has little impact on the on-going project.”
This sentiment is shared by CNOOC Ltd President Zhou Shouwei. In a statement Zhou said, “Significant progresses have been made to optimise the overall development program of the project [and] we remain confident about the technical and commercial viability of the project and expect to complete the project on time.”
“Chunxiao field, the first field to be completed in Xihu Trough, is expected to come on stream in mid-2005 as scheduled [and] it will begin to supply gas to the Eastern China region as planned,” added Zhou.
In a statement Unocal Vice President International Energy Operations Don R. Hansen said, “Unocal Corp and the Royal Dutch/Shell Group have elected not to proceed with [our] participation in five contracts to explore for, develop, and market natural gas resources in the Xihu Trough.
“Over the past year, we have conducted a detailed resource assessment and studied various development options [and], for commercial reasons, we have elected not to proceed with the project. We have enjoyed excellent cooperation with both CNOOC and Sinopec, and we look forward to other opportunities to work together,” added Hansen without elaborating further.
Under the terms of the August 2003 agreement CNOOC Ltd held a 30% percent stake in the project, Sinopec had 30% and both Unocal (via its Unocal East China Sea Ltd unit) and Shell (via its Pecten Orient Co LLC subsidiary) each held 20%.