CHINA National Petroleum Corporation (CNPC) has found oil and gas off the coast of one of the Paracel Islands, a disputed territory in the South China Sea.

CNPC announced it had wrapped up a drilling and exploration campaign over the Zhongjiannan project on schedule on 15 July, after having completed the second of two wells on the project area, offshore Zhongjiannan Island.

The company used the HYSY-981 drilling platform run by China Oilfield Services Limited, with the rig to be moved to the LingShui blocks offshore Hainan Island for new works.

CNPC said it had identified the well locations following geophysical prospecting activities conducted mainly for seismic data acquisition over the area dating from 2004.

“In accordance with the work procedures of deep-sea petroleum exploration and development, a comprehensive assessment of hydrocarbon horizons is to be implemented based on the geological and analytical data collected through the drilling and exploration operation,” the company said in an announcement.

CNPC will determine the next phase of the project following this assessment.

The news came after CNPC kicked off large scale gas injection at its Xiangguosi underground gas storage facility as four new injection and extraction wells became operational.

The gas storage is expected to provide 10 million cubic metres of natural gas to the major pipeline networks in China for winter peak shaving on a daily basis by December of this year.