CNOOC to soon marketing oil from new contracts: Report

CNOOC Ltd., China's sole offshore oil operator, will soon start selling Indonesian crude oil entitled to it through its new production sharing contracts, or PSCs, a source close to the company was quoted by Dow Jones as saying.

CNOOC will start marketing crude from three of the five fields under its PSCs in two to three months, he told Dow Jones Newswires.

The crude is being produced via PSCs that CNOOC signed with Spain's Repsol YPF S.A. in January, he said.

CNOOC will likely target China, Japan and Australia as the major markets for the medium-gravity, low sulfur Widuri and Cinta crudes, according to the source.

In the January deal, which cost CNOOC US$585 million and makes it the largest offshore oil producer in Indonesia, CNOOC acquired five upstream assets from Repsol YPF - including a 65.34 percent stake in Widuri field and Cinta field, and a 36.72 percent stake in Ardjuna field. CNOOC will sell crude from the other two fields, Madura and Poleng, later, the source said.

The three fields produce a combined 170,000 barrels a day, he said. The amount of oil CNOOC gets through its PSCs is in proportion to the size of the stakes it holds in the fields.

In addition, CNOOC owns a 39.51 percent stake in the Malacca field in Indonesia. (*)