Primeline Energy has signed a letter of intent (LoI) with China Oilfield Services (COSL) to carry out drilling operations in an upcoming exploration programme in Block 33/07 in the East China Sea.

The drilling contract is worth $20m and due to begin in August.

Primeline has been holding discussions with various potential drilling contractors in the region during the last few months to secure optimal contract terms for a cost-effective drilling operation.

“COSL will perform turnkey drilling works for two wells in Block 33/07 for Primeline.”

Under the LoI, COSL will perform turnkey drilling works for two wells in Block 33/07 for Primeline.

According to Primeline, the first well will be LS23-1-1 and after assessing its results the second well will be selected from two further candidate locations.

This exploration drilling programme is said to be the initial step in Primeline’s rolling development strategy.

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The production infrastructure hub and access to gas market have been established and LS36-1 has been in production, Primeline said.

COSL’s drilling programme is aimed at finding more hydrocarbons to capitalise the infrastructure hub and access to market.

China-focused Primeline has a 75% contractor’s interest in PPC (25%), and is the operator of the petroleum contract with CNOOC for Block 33/07.