Geology and history

Geology

• Reservoirs range from Eocene-aged fluvial-lacustrine sandstones of the Luishagang Formation, to Miocene-aged Jiaowei shallow marine sandstones, and the Oligocene-aged Weizhou sandstones.
• Oil quality varies - light to heavy quality, low to medium viscosity. Some waxy crude.

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Regional activity

• The block is in an area of known oil fields.  The nearest producing field is Wei 12-1 (production from Weizhou Formation), 1,800m from the original Block 22/12 boundary.
• The Wei 12-1 field includes a well which yielded one of the highest oil flows encountered anywhere in China:  34,000 BOPD.

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Permit size

• 82.1km2 (total for two development areas)

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History

• ROC farmed into offshore Block 22/12 in 2002 taking a 25% interest.  Within the month of the farm-in the first well was drilled and discovered the Wei 6-12 oil field.  ROC structured the farm-in as a one well option, which it duly exercised after the discovery, acquiring the operatorship and increasing its equity to 40% via a further farm-in.
• In 2004, ROC drilled an appraisal well on the Wei 12-8 East oil field which successfully confirmed the presence of oil but also indicated that the oil was viscous so commercial development would not be straightforward. 
• In April / May 2006, ROC drilled the Wei 6-12S-1 exploration well and made a potentially significant oil discovery.
• The exploration period for Block 22/12 ended on 30 September 2008.  An extension to the PSC was granted for areas covering the Wei 6-12 and Wei 12-8 discoveries to allow the completion of the joint development feasibility study and the Overall Development Plan ("ODP") with CNOOC.
• The technical section of the ODP was completed in December 2009.  Agreement was reached with CNOOC on commercial terms of the ODP in 2Q 2010.  A Supplemental Development Agreement was signed on 24 August 2010. CNOOC approved the project investment and ODP in January 2011 and this was followed by FID in February 2011.  The EIA was approved by the State Oceanic Administration (SOA) in February 2012.  The final Chinese Government approval required is for sanction of the project by the National Development and Reform Commission (NDRC). 
• In 2Q 2010, CNOOC elected to participate for its full 51% share in the development, reducing ROC's share to 19.6%.

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JV participants and interests

CNOOC Limited (Operator)	51.0%
Roc Oil (China) Company	19.6%
Horizon Oil (Beibu) Limited	14.7%
Petsec Petroleum Inc.	12.3%
Oil Australia Pty Ltd	2.5%