Amoco, China Sign Joint Agreement To Undertake $500 Million Oil Project

A joint-venture agreement between Amoco Corp and China was recently signed to develop an oil field in the South China Sea. The project is expected to cost around $500 million and produce 50,000 barrels of oil a day, a spokesman for the company said.

Amoco's chairman and chief executive officer, Richard M. Morrow, said: "Since discovering the field in 1987, Amoco has conducted extensive evaluations in this South China Sea area, which will enable us to overcome challenges presented by conditions such as deep water, adverse weather, relatively heavy oil and complex reservoir properties." China, at 24 billion barrels, has the world's lOth-ranked oil reserves, just behind the U.S. with 25.8 billion.

China was the No. 6 producer in the world in 1989, with output of just over 1 billion barrels.

Since China opened the country to foreign exploration in 1980, at least 31 companies have spent more than $1 billion exploring for oil.

The field would require horizontal drilling, subsea wells and floating production systems, Mr. Morrow said.

Amoco was granted a 49 percent share in the venture, which was signed in Houston by Amoco and the China National Offshore Oil Corp.

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