JUNIOR hydrocarbon explorer Nido Petroleum Limited has made considerable progress with its project in China and expects to produce oil in the first quarter of this year.
The company’s latest quarterly says a three month technical review of the Zhongyuan project has increased confidence in its success.
“The work demonstrated that oil recoveries greater than previously estimated are possible and have already been achieved in some parts of the field,” Nido managing director Peter Henderson said.
Nido is in joint venture with the US-based Monde Group and is earning a 40 per cent stake in the project, located in the Zhongyuan fields about 500 kilometres south of Beijing.
A study by a team of geologists and engineers showed that different blocks in the Hu and Wen fields host large areas that are effectively undrained of oil.
“Forecast incremental oil from Hu 12 block alone is estimated at about eight million barrels of oil,” Mr Henderson said.
A two-year pilot test program and budget has been developed and approved by the JV management committee.
The project has been given the thumbs up by Perth-based advisors Resource Investment Strategy Consultants (RISC).
RISC director Geoff Barker described the project as a relatively low risk entry into oil production.
“Because of the nature of the project, the exposure is not great and there is considerable upside,” he told Business News.
(The writer has shares in the company.)
