Primeline Energy has agreed with China National Offshore Oil Corp. (CNOOC) that it will enter the next and second phase of exploration commitment under the petroleum contract for Block 33/07, in the East China Sea.

Block 33/07 is located about 390 kilometers of Shanghai in the East China Sea, with water depth of 90 meters. Primeline is the operator of the petroleum contract with CNOOC for Block 33/07.

Primeline stated that this decision followed the completion of its evaluation of the 2015 programme which saw a drilling operation of two exploration wells – LS23-1-1 and LS30-3-1.

According to Primeline, both wells encountered very good sandstone reservoirs as predicted and gas shows, but were not commercial.

By entering into phase two, Primeline has agreed to relinquish 25% of the contract area under the petroleum contract. The contract area for Block 33/07 is 4,397 sq km.

Block 33/07 surrounds Block 25/34 where the LS36-1 gas field is located. Primeline added that any discovery from Block 33/07 can enjoy the benefit of LS 36-1 production facility which has been in production since July 2014.