CHINA'S OFFSHORE OIL PRODUCTION TO RISE AS NEW FIELDS START UP

CHINA'S OFFSHORE OIL PRODUCTION TO RISE AS NEW FIELDS START UP

While China's onshore oil production is declining, officials say offshore output will pick up in the next few years with seven new fields in operation.

They will have combined annual output of 35 million barrels of oil and more than 35 billion cubic feet of natural gas by 1992, an unidentified officer of China National Offshore Oil Corp. said Monday.He said this year's plans call for a boost of 11 percent in offshore production to about 7 million barrels from the 6.2 million of 1989. Overall, offshore production should rise in stages to 56 million barrels by 1995.

The Chinese oil official told the English-language newspaper China Daily that the first of the new fields will go into operation in May. Designated Bozhong 34-2/4 in the Bohai Sea, it is a Sino-Japanese venture.

Huizhou 21-1, off the Pearl River southeast of Hong Kong, should begin operating in August, the official said. Its overseas partners include the Chevron Orient unit of Chevron Corp., San Francisco, and Texaco Orient Petroleum, a unit of Texaco Inc., White Plains, N.Y.

Those two fields have an estimated annual capacity of 10 million barrels, the official said.

Two fields are due to begin producing next year, Huizhou 26-1, also off the Pearl River with U.S and Italian interests participating; and Lufeng 22-1, a South China Sea venture with the Occidental Eastern Inc. unit of Occidental Petroleum Corp., Los Angeles.

The final three fields, operated solely by Chinese companies, will start operation in 1992, the official said. He identified them as Jin Zhou 20-2, a gas field in Liaodong Bay; and the Suizhong 36-1 and Wei 11-4 oil fields, both in the Beibu (Tonkin) Gulf off Vietnam.

China last year produced 963 million barrels of crude oil (2.64 million barrels a day), an increase of just 4 million barrels over 1988 and some 30 million barrels below the state target, official statistics show.

Most of that came from aging onshore fields, which are struggling to maintain output. The oldest and largest, Daqing in the far northeast, has been in production for nearly 30 years and accounts for about 40 percent of total Chinese production.

China's loudly touted bonanza of offshore oil and gas deposits has not yielded much, so far, despite more than $2 billion invested by foreign companies over the last several years.

With only three fields in production, many companies have become disillusioned, especially when oil prices dipped or languished at low levels.

China intends to drill 18 test wells this year in cooperation with overseas partners, the official said, and is awaiting government approval to open areas of the East China Sea to foreign bidding.

A state energy planning board including representatives of China National Offshore Oil said last month its five-year plan for the 1991-95 period will focus on closer cooperation with foreign oil companies.