In a statement the firm said, “The Eocene Shahejie zone is a prolific oil producing section in several large onshore fields that rim the western part of Bohai Bay. The Shengli Complex, Dagang and Jidong fields contain an estimated 2.5 billion barrels of recoverable reserves from the Shahejie zone [and our] discovery, along with other Shahejie fields in the shallow water, extends the play type into Bohai Bay.”

According to Kerr-McGee senior vice president of oil and gas exploration and production, Dave Hager, “Kerr-McGee will submit an appraisal plan for the CFD 14-5 area to the [Chinese] government and the first appraisal well is expected to spud prior to the end of 2004. Appraisal drilling is required to confirm the size and commerciality of this discovery, but we are encouraged that several nearby fields, both onshore and offshore, have large reserves from this stratigraphic interval.”

“The Bohai Bay area continues to add value as a core exploration and production play for Kerr-McGee [and] two fields are already on production and development planning also is under way for five of our Bohai Bay discoveries, which are candidates for tie-back to our initial development,” he added.

Kerr-McGee holds a 100% foreign contractor’s interest in the block.