Atlantic Richfield - Re Agreement Signed

RNS No 4196b
ATLANTIC RICHFIELD COMPANY
20th October 1997

 
ARCO, CNOOC SIGN COOPERATION AGREEMENT FOR DEVELOPMENT OF LEDONG GAS FIELDS IN
SOUTH CHINA SEA
 
LOS ANGELES, October 20 - A cooperation agreement for development of the Ledong
natural gas fields in the South China Sea was signed here today by the chief
executives of Los Angeles-based ARCO (NYSE: ARC) and the China National Offshore
Oil Corp. (CNOOC).
 
The three fields, covering about 925 square kilometers (357 square miles), were
discovered in 1996 by Nanhai West, a CNOOC subsidiary, about 100 kilometers (62
miles) southwest of Hainan Island. ARCO currently operates China's largest
offshore natural gas field, Yacheng 13-1, in a nearby area of the South China
Sea.
 
The agreement signed today by CNOOC President Wang Yan and ARCO Chairman and
Chief Executive Officer Mike R. Bowlin clears the way for the two companies to
combine resources to determine the economic viability and possible development
of the discoveries.
 
Toward this end, ARCO will complete an engineering and geology evaluation of the
fields, assess recoverable reserves and identify markets for the gas. If the two
companies agree that the area is worth joint development, they will begin
further cooperation in the near future.
 
In 1981, ARCO became the first foreign oil company to sign an offshore
exploration contract with the People's Republic of China. This led to the 1983
discovery of the Yacheng 13-1 gas field with its 3 trillion cubic feet of
reserves southwest of Hainan Island. CNOOC, ARCO and Kuwait Foreign Petroleum
Exploration Co. are joint developers of that field. Most of the Yacheng gas is
delivered to the Black Point Power Plant in Hong Kong via a 480-mile subsea
pipeline. Another pipeline makes gas deliveries to Hainan Island.
 
''The Yacheng 13-1 pipeline infrastructure will play a critical role in
determining the commerciality of the Ledong gas fields,'' said Bowlin. ''If
development proceeds, the project will enable CNOOC and ARCO to build additional
value in the South China Sea and supply cleaner-burning natural gas for the
energy growth needs of southern China.''
 
For a menu of ARCO's news releases or to retrieve a specific release, visit our
Web site at http://www.arco.com on the Internet.
 
Contact: Albert Greenstein, tel [phone] or Frank Kryza, 
tel [phone], both of ARCO
 

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