HONG Kong-based Primeline Petroleum Corp yesterday signed an agreement for the lease of almost a third of all oil concessions on offer in the East China Sea. Primeline said in a press release that it had obtained a controlling interest in five offshore exploration leases covering 23,140 square km. The leases were acquired from China National Offshore Oil Co by a newly formed holding company called Cluff Oil (China), which is 51 per cent controlled by Primeline Petroleum, owned by Victor Hwang - the chief executive officer of the Hong Kong Parkview Group - and 49 per cent by Cluff Oil (Hong Kong). ''Given its speed of infrastructure development, China will have an increasing demand for petroleum in the coming decades, and we see a great deal of potential, both industrially and in the consumer market,'' Mr Hwang said in a written statement. He added that the mainland's offshore oil production this year would be more than four million tonnes, and onshore production 138 million tonnes, but said China needed more reserves to support its economic development. China opened its continental shelf to foreigners in 1982, and since then has signed 79 contracts with 51 oil companies from 14 countries. Although offshore oil production is still small compared with onshore output, the offshore sector is now growing at a faster rate. Mr Hwang said the average success rate for most international exploration was as low as 10 per cent, but in the East China Sea the success rate had been nearly 50 per cent. ''We believe that the East China Sea will be the most important area for future major oil and gas discoveries in offshore China,'' he said. The Primeline deal comes two months after China signed contracts with Texaco, Agip of Italy and Maersk of Denmark to jointly explore three blocks in the East China Sea. Exploration costs are expected to be about US$100 million in the first three years. Primeline's five lease blocks are about 300 km offshore, east and southeast of Shanghai, and are among 20 East China Sea blocks covering 72,800 sq km offered to international bidders. since June 1993. Mr Hwang said that in 1996 a pipeline connecting Pinghu, north of the Primeline exploration area, with Shanghai was due to be completed, ''which will significantly affect the economics of future discoveries in the East China Sea''.