CHINA'S OIL EXPLORATION ARM PUSHES FOR NEW DEVELOPMENT

CHINA'S OIL EXPLORATION ARM PUSHES FOR NEW DEVELOPMENT

China's state-run offshore oil exploration company appears to be putting

pressure on its masters to open up the East China Sea, the last sector still

closed to foreign investment.

"I believe conditions are now ripe for China to open the East China Sea to foreign oil firms. We should grasp opportunities in time," said Wang Yan, vice president of China National Offshore Oil Corp.He appealed Thursday for a government ruling on the matter "as soon as possible."

As reported previously in The Journal of Commerce, the corporation announced last December its intention to allow overseas exploration in the East China Sea. It covers some 300,000 square miles roughly between Shanghai and Taiwan of which about 90,000 square miles is continental shelf.

Mr. Wang's new plea for action indicates that he either jumped the gun, or that the government isn't sure how to proceed. China has debated opening up the area for several years, but never explained what it perceived as the pros and cons.

Foreign companies have sunk more than US$3 billion into offshore exploration, mostly in the South China Sea, an arc off Hong Kong, with little to show for a decade's efforts. Parts of the Yellow Sea in the north opposite Korea and Bohai Bay in the northeast are also open to overseas firms.

Mr. Wang said his company is ready to accept international oil groups in the East China Sea and that "many" are paying close attention to the prospect. Large oil and natural gas fields are expected to be found, he added, which is what China said of the South China Sea.

China National Offshore Oil, now marking its 10th birthday, has worked with nearly 50 overseas companies from 13 countries. Chevron Corp. of San Francisco, Amoco Corp. of Chicago, Texaco Inc. of White Plains, N.Y., British Petroleum PLC, Royal Dutch/Shell, Italy's Agip SpA and a clutch of Japanese firms are among the longest-standing of its partners.

Thus far, 67 oil and gas sources have been verified, Mr. Wang said. He put their combined reserves at 6 billion barrels of oil and 930 billion cubic feet of natural gas.

Mr. Wang said he expects to sign eight more contracts this year, but gave no indication of the partners or locations involved. It signed seven deals last year, bringing to around 40 the total covering six offshore oil fields in production and seven under development.

Another company vice president, Chen Bingqian, forecast offshore output this year of 22 million barrels, against the 17.4 million of 1991. That contrasts with China's total oil output last year of 1.2 billion barrels.