China Oilfield Services Ltd (COSL) plans to spend 3 billion yuan (HK$3.33 billion) in the next three years to beef up its capacity to serve the nascent but high-potential deepwater drilling market.
Going deepwater is one of three business drivers of the nation's dominant offshore oil services provider this year, according to chief executive Yuan Guangyu.
'We plan to expand our foothold in overseas markets, penetrate into onshore markets and tap the deepwater segment,' Mr Yuan said a day after the company posted a 98.3 per cent jump in net profit to 2.23 billion yuan for last year.
He said the 3 billion yuan in spending included the construction of two working vessels and one seismic vessel. This is in addition to two special ships - called deepwater anchoring handling tug supply vessels - ordered from Rolls-Royce. They are to be delivered in 2010 and 2011 at a cost of US$100 million.
China's offshore deepwater is considered virgin territory. The only major discovery so far has been made by Canada's Husky Energy in the South China Sea.
Overseas exploration firms have signed about 10 contracts with COSL's parent, China National Offshore Oil Corp, to conduct exploration and, if discoveries are made, share revenues.
China National is building a 6 billion yuan drilling rig capable of operating in water depths of 3,000 metres to be operated by COSL by 2011. COSL's 15 rigs can operate only at depths of up to 457 metres.