Cluff reaches key stage in oil search off Jiangsu coast
ONE last attempt to strike it rich in the Yellow Sea is to be made by Cluff Oil (HK), the oil group that has the backing of some of Hongkong's leading businesses.
The company is close to completing an exploration well on block 24/6, 15 kilometres off the coast of Jiangsu province.
This is Cluff's fourth attempt to strike oil in the region. The company's major shareholder is Britain's Cluff Oil, run by the flamboyant Mr Algy Cluff, and shareholders include Cheung Kong, Hongkong and Shanghai Bank, Swire, Inchcape, Wheelock Marden and Worldwide.
The previous three wells drilled on Cluff licences proved dry. However, estimates of possible reserves on the block being drilled stretch to almost 50 million barrels.
With the well so near shore and in relatively shallow waters, the jack-up rig operated for Cluff by Monument Oil is expected to reach a depth of 1,500 metres, where any oil would probably be found, within the next few days.
If this attempt proves a further disappointment for Cluff, it is likely that the partnership will be disbanded, although the UK parent continues to enjoy a strong income stream from its interests in British North Sea oil.
However, with Cluff's rig working almost within sight of some of the 14 onshore production wells operated by Chinese companies in Jiangsu, the Hongkong group is hoping that the field will extend to its block.
Jiangsu province is attracting the attention of other Western oil explorers.
Royal Dutch Shell this year signed an agreement with China National Oil and Gas Exploration and Development Corp (CNODC) enabling it to search in the east of the province, along the coastal areas of Yancheng, Baiju and Hai'an.
The search for oil by international oil companies in China has yet to result in major finds.
An estimated US$3.2 billion has been spent on the search for the elusive black gold, but little has surfaced.
But while some may and move on, others are prepared to carry on looking. More than a score of oil companies have recently bid for the rights to explore off China's coast.