Chinese Petroleum Corp (
The partners, the first state-owned oil producers from Taiwan and China to participate in a joint venture, intend to start drilling a second well in the Tainan Basin before the end of this year, said Koong Hsung-pung, director of CPC's exploration and production business division.
"The first well wasn't successful," Koong said before a business forum in Taipei yesterday. "We will use the information from the first well for the second and third wells we plan to drill."
China and Taiwan are looking for oil and gas in the Taiwan Strait as oil-import bills soar.
China spent 86 percent more in April to import oil than a year earlier, the Chinese government said on May 26. Taiwan's per-barrel oil import costs in the first quarter surged 29 percent from a year earlier. Taiwan imports almost all of its crude-oil needs.
CPC has asked the Taiwanese government to approve a second agreement with China National Offshore, Koong said. The firms plan to evaluate oil deposits off Hsinchu and have sent a draft contract to the Ministry of Economic Affairs, he said.
"We hope the government will agree to allow the two sides to start evaluating if this area is worth exploring. We hope there will be other deals" with China National Offshore, Koong said.
The companies may spend US$22.5 million to drill one or two exploration wells in the waters off Hsinchu, CPC vice president Chang Hung-chiang (張鴻江) said during the forum.
CPC and China National may also cooperate to explore for oil and gas in the East China Sea, Koong said.
The firms agreed in May 2002 to spend a combined US$25 million to drill three exploration wells to look for oil and natural gas in a 15,400km2 area between southern Taiwan and China.
Political tensions across the Taiwan Strait haven't stopped business ties from forming. Local companies, including Taiwan Semiconductor Manufacturing Co (台積電), have built plants in China, where international rivals are expanding and labor is cheaper.
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