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there is clear disappointment that no significant discoveries have so
far been made, it is much too early to become despondent on the
eventual outcome offshore China. It was some time after exploration
commenced in the North Sea that the first oil was discovered and the
acreage offshore China is considerably greater than that of the North
Sea. Our Chinese friends recognise the vital role of crude oil in
generating foreign exchange and a second round of offshore licensing,
in which British companies feature, is already underway.
Similar, serious attention is being given to China's onshore hydro-
carbons both in terms of sustaining the flow from established fields and
locating new deposits. In recent times Britain's oil and gas expertise
Much
has been closely linked to offshore operations and while the UK is now
recognised as the world's leading centre for the development of deep
water technology, it would be quite wrong to suppose that British capabil-
ity is confined solely to offshore work. Indeed, British companies have
been finding and developing hydrocarbons onshore for over 50 years.
of the pioneering work in the Middle East oilfields was undertaken by
British engineers using British services and equipment. Also in the
Far East, British companies have been involved for many years in onshore
operations. Recently the rewards offered by the search for offshore
hydrocarbons has tended to dominate the attention of many countries and
Britain is no exception. Now the pendulum is swinging back; in many
parts of the world fresh impetus is being given to new and improved
onshore operations.
In Britain there has been an onshore revival and
this year, 74 onshore exploration licences have been awarded to a total
companies of 91 countries. I very much hope that British collaboration in China's
oil sector can also embrace onshore operations.
Returning briefly to offshore, a significant natural gas reservoir has
been discovered in deep and difficult waters off Hainan Island in the
South China Sea. This project has attracted considerable attention from
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