Date: Wed, 19 Nov 1997 23:31:27 GMT Server: Apache/1.2.0 Last-Modified: Thu, 13 Nov 1997 22:43:04 GMT ETag: "1d8575-1402-346b8278" Content-Length: 5122 Accept-Ranges: bytes Connection: close Content-Type: text/html Phillips Finds Oil in China's Bohai Bay
11/06/97 Phillips Petroleum Company

Phillips Finds Oil in China's Bohai Bay

Peng Lai 14-3-1 well flows 1,602 barrels of oil per day;
Company plans seismic work and further drilling

BARTLESVILLE, Okla., November 6, 1997 --- Phillips China Inc., a unit of Phillips Petroleum Company [NYSE: P], today announced an oil discovery in the Bozhong Block of China’s Bohai Bay.

The Peng Lai 14-3-1 well was drilled to a total depth of 12,766 feet in 79 feet of water. The well intersected a gross oil column of 686 feet, from 7,434 feet to 8,120 feet, in Miocene-age sandstone. Two drill-stem tests flowed oil at a combined peak rate of 1,602 barrels of oil per day. Oil gravity ranged from 26- to 36-degree API from test intervals of 39 and 46 feet. The wax content of the oil gave it a relatively high pour point, typical of oil found in Bohai Bay and similar to that produced at Phillips’ Xijiang operations in the South China Sea. The Peng Lai 14-3-1 well was drilled in the east central sector of the 2.3-million-acre block in the Gulf of Bohai, 240 miles southeast of Beijing.

Phillips China Inc. is operator with a 60 percent interest; Union Texas Petroleum [NYSE: UTH] holds the remaining 40 percent. China National Offshore Oil Corp. (CNOOC) has the right to acquire up to a 51 percent interest in any proposed development.

Phillips acquired the right to explore the Bozhong Block in 1994 when its China unit signed a petroleum contract with CNOOC. The Peng Lai 14-3-1 is the second well Phillips has drilled on the block. The first well, the Bozhong 22-2-1, was plugged and abandoned in January 1997 after it tested hydrocarbons at non-commercial rates. Phillips spudded a third well, the Bozhong 36-2-1, earlier this month 35 miles south-southwest of the Peng Lai well. The company plans to gather more seismic data and to drill another well on the block next year.

The Bozhong contract area is the third Phillips-operated exploration and production project in China. The company currently is producing from the Xijiang oil fields in the South China Sea and is the operator and majority owner of the Hedong joint venture coalbed methane concession onshore China, in Shanxi Province.

Phillips is an integrated petroleum company with 17,000 employees worldwide. Founded in Bartlesville, Okla., in 1917, the company has $14.2 billion of assets and $16 billion of annualized revenues.


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