China's New Offshore Oil Venture Takes Shape

In the vast South China Sea, a new offshore oil project has begun operations. The Xijiang Oilfields 24 Block Development Project, situated in the Pearl River Mouth Basin, is a shallow-water venture that taps into existing infrastructure from the nearby Huixi Oilfields. This project is notable for its use of a brand-new unmanned wellhead platform, named Xijiang 24-7. The project is designed to include 10 production wells, with expectations to reach a peak output of around 18, 000 barrels of oil equivalent per day by 2026. The oil produced here is of the light crude variety, which aligns with the company's focus on high-quality oil from mature offshore basins. One standout feature of this project is the Xijiang 24-7 platform. It's China's first unmanned offshore platform equipped with a system for cooling high-temperature fluids. This technology is crucial for maintaining stable production and reducing operational risks, as it prevents the negative effects of high temperatures on subsea pipelines.The company behind this project holds a full 100% interest and is responsible for its operation. This venture highlights the company's strategy of focusing on incremental developments and tie-backs in established offshore areas. By leveraging existing infrastructure, the company can speed up development timelines and keep capital costs in check, a strategy that's becoming increasingly popular among national oil companies. The use of unmanned platform technology also reflects a broader trend in the industry. Chinese offshore operators are increasingly turning to automation and digitalization to lower operating costs. These systems not only reduce the need for personnel offshore but also improve production reliability, which is especially important in mature basins where profit margins are tight. This project comes at a time when China is prioritizing domestic oil and gas supply security. Offshore developments are a key part of this strategy, as onshore output growth becomes more challenging and import dependence remains high. For the company, this project is part of a series of recent offshore start-ups aimed at supporting medium-term production targets. It also allows them to integrate new technologies into their upstream portfolio.