CNOOC Accelerates Offshore Production with Dual Major Project Startups
China National Offshore Oil Corporation (CNOOC Ltd.) has commenced production at two significant projects within a week, underscoring its aggressive development strategy and robust operational capabilities across China’s offshore basins. The latest additions, the Dongfang 1-1 Gas Field 13-3 Block Development Project in the South China Sea and the Kenli 10-2 Oilfields Development Project in the Bohai Sea, represent critical advancements in both natural gas and oil production, further solidifying CNOOC’s role as a leading energy provider and a compelling investment opportunity in the upstream sector.
These new initiatives bring CNOOC’s total project startups offshore China to nine for 2025, demonstrating an impressive pace of execution and a deep commitment to expanding hydrocarbon output. Investors should note the strategic importance of these projects, not just for their individual production capacities, but for their contribution to China’s overarching energy security objectives and CNOOC’s long-term growth trajectory.
Dongfang 1-1: Unlocking Challenging Gas Reserves in the South China Sea
The Dongfang 1-1 Gas Field 13-3 Block Development Project, situated in the Yinggehai Basin of the South China Sea, marks a pivotal achievement for CNOOC. This project distinguishes itself as China’s inaugural offshore natural gas venture tackling a high-temperature, high-pressure, and low-permeability reservoir. Such geological conditions present significant technical hurdles, making CNOOC’s successful startup a testament to its advanced engineering and operational expertise in complex offshore environments.
Located in waters averaging approximately 67 meters (219.82 feet) deep, the Dongfang 1-1 field is wholly owned and operated by CNOOC Ltd. The company projects the field will achieve its full production capacity of around 35 million cubic feet per day (MMcf/d) by next year. Development plans include the drilling of six new wells, which will strategically integrate with existing infrastructure from the broader Dongfang gas fields. This integration involves leveraging current facilities to connect Dongfang 1-1 with the Dongfang 13-2 gas field, thereby establishing a sophisticated and interconnected offshore gas production network throughout the Yinggehai Basin.
This integrated approach is not merely an operational efficiency; it carries substantial strategic implications. CNOOC highlights that this network will significantly enhance the stable and reliable supply of natural gas to key economic hubs in the region, including Guangdong, Hong Kong, and Hainan. For investors, this translates into a diversified revenue stream, reduced operational risks through shared infrastructure, and a reinforced market position in a high-demand area, underpinning CNOOC’s valuation.
Kenli 10-2: A Major Oil Discovery and Technological Showcase in the Bohai Sea
Just prior to the Dongfang 1-1 announcement, CNOOC celebrated the commencement of Phase I of the Kenli 10-2 Oilfields Development Project. Located in the shallow waters of the Bohai Sea, a vital part of the Yellow Sea, Kenli 10-2 is heralded as China’s largest shallow lithological oilfield offshore. With an average water depth of approximately 20 meters, this project represents another significant milestone in CNOOC’s offshore oil exploration and production portfolio.
This 100 percent CNOOC-owned asset is expected to reach a peak production rate of 19,400 barrels of oil equivalent per day (boe/d) in 2026. The development plan is ambitious, encompassing 79 wells, including 33 designated for cold recovery, 24 for thermal recovery, 21 for water injection, and a single water source well. This intricate well architecture reflects the advanced recovery strategies employed at Kenli 10-2.
Notably, Kenli 10-2 holds the distinction of being the first lithological oilfield discovered in the shallow depression zone of the Bohai Bay Basin with a proven in-place volume exceeding 100 million tons. CNOOC has deployed an innovative, combined development approach that integrates conventional water injection with advanced thermal recovery techniques like steam huff and puff and steam flooding. This cutting-edge methodology provides robust technical support for optimizing the utilization of these substantial oil reserves, particularly heavy oil, and underscores CNOOC’s leadership in enhancing recovery factors from complex reservoirs.
The project’s infrastructure further exemplifies CNOOC’s engineering prowess. Its production platform is a sophisticated marvel, uniquely integrating both conventional cold production and thermal recovery systems. Equipped with over 240 sets of critical equipment, it stands as one of the most intricate production platforms in the entire Bohai region and is recognized as the first large-scale thermal recovery platform dedicated to heavy oil in the southern Bohai Sea. This technological sophistication mitigates operational risks and ensures efficient, long-term production from a challenging resource base.
CNOOC’s Relentless 2025 Development Pipeline
These two recent startups are part of a broader, aggressive development campaign by CNOOC in 2025. With nine projects already brought online this year, the company is on track to significantly boost its domestic energy output. Prior to Dongfang 1-1 and Kenli 10-2, CNOOC had already announced seven other key project inaugurations across its core operating regions.
In the Bohai Sea, these earlier startups include the Caofeidian 6-4 field adjustment, Phase II of the Luda 5-2 North field, and the Bozhong 26-6 field. Each of these projects contributes to the region’s overall oil and gas output, leveraging existing infrastructure and expanding production capabilities in a well-established operating area.
Concurrently, the South China Sea has seen several other significant projects come online. These comprise Phase II of the Wenchang 19-1 field, the Dongfang 29-1 field, the comprehensive Panyu 11-12/10-1/10-2 Oilfield Adjustment Joint Development Project, and the Weizhou 5-3 field. This widespread activity across both major basins highlights CNOOC’s commitment to maximizing the value of its extensive offshore acreage and its proficiency in managing multiple large-scale developments simultaneously.
Investor Outlook: A Dominant Force in Offshore E&P
For investors focused on the global energy sector, CNOOC Ltd.’s consistent project delivery and technical innovation paint a picture of a dynamic and growth-oriented enterprise. The successful startups at Dongfang 1-1 and Kenli 10-2, coupled with the robust pipeline of other projects, demonstrate CNOOC’s ability to not only identify and appraise significant hydrocarbon reserves but also to efficiently bring them to production, even under challenging geological and operational conditions.
These developments directly contribute to CNOOC’s production targets and revenue forecasts, enhancing its intrinsic value. As China continues to prioritize domestic energy security, CNOOC stands as a critical enabler, consistently expanding its output of both natural gas and crude oil. The strategic integration of new and existing facilities, coupled with the deployment of cutting-edge recovery technologies, positions CNOOC for sustained long-term growth and stable cash flows, making it a key player to watch in the evolving landscape of offshore oil and gas investment.
