File photo: Xinhua

Deepwater oil and gas production remains a key trend in the energy sector, and global cooperation on deep-water exploration needs to be enhanced to reduce costs against a backdrop of low oil prices, Chinese oil and gas experts said at China Energy Week 2020, a conference jointly held by the Oil Observer and Shanghai Petroleum and Natural Gas Exchange.

It is estimated that offshore oil resources account for about 34 percent of the total global oil resources, meaning that supply is sufficient, said Zhu Weilin, a professor at the Tongji University.

"At present, global deepwater investment accounts for about 33.3 percent of total offshore investment [in the oil and gas sector], and deepwater projects account for 25 percent of global offshore projects," he said, adding that 75 percent of the top 50 mega projects in the world are deep-water projects.

Around 70 percent of the world's major oil and gas discoveries have come from waters with a depth of more than 1,000m in the past five years, and the trend has been gathering pace annually, meaning deep water exploration is of great significance to both the present and the future, Zhu said.

Major international oil companies are shifting their exploration and development focus from land to sea, and are accelerating their entry into deep water, said Zhu. Major companies account for nearly 50 percent of the reserves in the marine sector, with oil giant Eni accounting for nearly 70 percent, Zhu noted.

"Most of the newly discovered large oil and gas fields in the world are offshore, but developing deep-water oil and gas production requires large investment, particularly now that the oil price is so low," said Luo Youan, former president of drilling research institute of China Oilfield Services Co.

"Oil service companies should reduce costs through technical means such as their ability to quickly identify and avoid typhoons, and advancing drilling technologies," Luo said.

The low-carbon energy trend will continue to gain traction during the period of the 14th Five-Year Plan, so China's overall deep-water sector should improve quality control, improve standards, and understand the entire deep sea industrial chain and ecological environment, said Jin Xiaojian, a veteran expert of China Offshore Oil Corp. 

"This is not something one or two companies can do, but relies on the improvement of the entire industry's capabilities," Jin said.

"China opened a total of 18 oil blocks this year to international oil companies. But due to the pandemic, many foreign companies cannot enter and there is no way to view the information related to them. As a result we currently have limited cooperation on offshore blocks, so we hope to find some win-win blocks soon," Zhu said. 

"In fact, the South China Sea's deep water is now more open to foreign companies, something that has encouraged joint research. In the future, I believe the central and southern regions of the South China Sea will be more easily accessed as China continues to open up," Zhu added.