(Yicai Global) Dec. 16 -- The Lingshui 17-2 natural gas field that state-backed oil company China National Offshore Oil Corporation is developing started drilling on Dec. 13.

This is the first large-scale deepwater natural gas field which a Chinese firm is independently operating, CCTV News reported.

The offshore well lies 150 kilometers southeast of Hainan island in the South China Sea, and the field's reserves that have been prospected contain more than 100 billion cubic meters. Its daily average production capacity is projected at 9 million cubic meters. Its annual output may be about 3.4 billion cubic meters during peaks, which will be able to satisfy the daily living demands of one-fourth of residents in the Guangdong-Hong Kong-Macau Greater Bay Area.

CNOOC Group plans to set up 11 production wells along the field, which stretches nearly 50 kilometers from east to west, and work in deepwater environments. The underwater production system will link directly with existing undersea pipelines and conduit the oil and gas produced to Guangdong and Hainan provinces, Hong Kong and other regions.

The depth of water where the Lingshui 17-2 gas field sits is around 1,500 meters, and its oil and gas layer is deposited about 2,000 meters below the sea floor, making it an ultra-deepwater field. Exploration is thus quite difficult because of the complex geological conditions. CNOOC has jumped various technical hurdles hemming in deepwater development and embarked on practical production in five years since discovering the field in 2014.

CNOOC is now initiating underwater exploration and development 1,500 meters down after mastering comprehensive offshore oil extraction technologies and corresponding management and equipment systems within 300-meter depths, Wang Dongjin, the Beijing-headquartered oil company's chairman noted, adding this move will lay a solid equipment foundation for the firm's future work at depths of 3,000 meters.

Massive deepwater oil and gas reserves lie off China's coasts, totaling about 35 billion oil equivalents. The technical difficulties involved in their exploitation naturally make them generally under-developed. 

Editor: Ben Armour