State-owned Chinese Petroleum Corp (CPC,
"The company has decided to go ahead with investing in Libya," said S.H. Chuo, a deputy chief executive at CPC's exploration and production business division.
Company president Chen Pao-lang (
Oil exploration has become increasingly important for CPC because it has lost money this year amid high oil prices and its limited ability to raise domestic prices.
Interested parties in Libya's third international licensing round need to submit bids by next Sunday, a CPC public-relations official said.
The company began studying Libya as a possible oil exploration target last year, following the lifting of most US sanctions against the African state in 2004.
So far, CPC's existing oil exploration projects off Taiwan's coast, in the US, Venezuela, Ecuador, Australia and Chad have produced few results, according to company data.
But CPC said yesterday that it had agreed with Beijing-based China National Offshore Oil Corp (CNOOC,
The companies plan to keep searching for oil and gas in the Tainan Basin off southern China after the original term of their agreement ends this year, Koong Hsung-pung, director of CPC's offshore exploration and production division, said.
The first well the two companies drilled was dry, he said.
The companies are the first state-owned oil producers from the two political rivals to participate in a joint venture. They have an agreement to drill three exploration wells to find new sources of oil and gas as the cost of energy imports soars.
"Our work is only one-third done," Koong said. "We are both willing to continue."
CPC and CNOOC agreed in May 2002 to spend a combined US$25 million to drill three exploration wells in a 15,400km2 area.
The companies' plan to start drilling a second well before the end of last year was delayed because the site lies on Taiwan's side of the Taiwan Strait, an Taiwan bars Chinese vessels from entering.
The partners may instead next drill a well located on China's side of the strait, Koong said.
Fu Chengyu (傅成玉), president of CNOOC and chairman of Hong Kong-listed unit CNOOC Ltd, has said that he was willing to push for the project to proceed, according to Koong.
Fu's visit last week to CPC's Taipei headquarters was his first to the company.
When Fu met with CPC officials on Thursday, the two companies expressed interest in "sharing experience" in exploration and production in areas offshore of China and Taiwan, Koong said.