China National Offshore Oil Company (CNOOC) announced on Monday the discovery of a “significant” oil field, Huizhou 19-6, in the eastern South China Sea. According to official data, the field has proven reserves exceeding 100 million tons of oil equivalent.
Technical Parameters and Significance of the Discovery
The field is located approximately 170 kilometers from Shenzhen in China’s southern Guangdong province at an average depth of about 100 meters. The test well HZ19-6-3 reached a depth of 5,415 meters and revealed 127 meters of oil and gas zones.
During testing, the well produced daily:
- 413 barrels of oil
- 68,000 cubic meters of natural gas (approximately 2.41 million cubic feet)
“The main oil-bearing layers are the Paleogene Enping Formation and Wenchang Formation, containing light crude oil,” stated CNOOC Ltd., which is majority-owned by the state company China National Offshore Oil Corp.
Strategic Significance of the Discovery
CNOOC Ltd.’s Chief Geologist Xu Changgui noted: “In recent years, CNOOC has strengthened research in exploration theories and technologies for deep and ultra-deep deposits in the South China Sea, resulting in these breakthroughs.”
“This discovery confirmed the largest integrated clastic oil field in the northern South China Sea in terms of original oil in place, breaking through traditional theoretical understanding and demonstrating the enormous exploration potential of deep and ultra-deep deposits in China’s coastal basins with high temperature and high activity,” Xu added.
CNOOC Ltd. CEO Zhou Xinhuai emphasized: “Oil fields with hundred-thousand-ton oil reserves have been discovered in this area for two consecutive years, making it a new growth engine for oil and natural gas production in coastal waters.”
Broader Context of Chinese Discoveries
HZ19-6-3 is the second discovery announced by CNOOC Ltd. this year, following the WZ10-5-1Sa well in the Weizhou 10-5 field in the Beibu Gulf (Gulf of Tonkin). This well reached a total depth of approximately 4,840 meters in an area with an average water depth of 37 meters and produced approximately 13.2 million cubic feet of gas and about 800 barrels of oil daily during testing.
Last year, CNOOC Ltd. made 11 oil and natural gas discoveries and evaluated 30 oil and natural gas structures across its global portfolio. By the end of 2024, its net proven reserves reached 7.27 billion barrels of oil equivalent, representing a year-on-year increase of 7.2 percent.
Analyst Perspective: Impact on Oil Markets
The new Chinese discovery could create pressure on prices for certain types of oil, especially light crude from the South China Sea region. With increasing domestic production, China may reduce imports primarily from regional suppliers such as Malaysia and Indonesia, whose extraction companies could experience a decline in demand.
At the same time, analysts caution that the full impact of this discovery will only be felt in the long term, as preparing the field for full production may take several years. However, this news may already create negative pressure on the shares of smaller light crude producers in the region, while Chinese energy companies, especially CNOOC itself, should see their market position strengthened.
