Sinopec drills 7th Saudi gas well after others disappoint

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BEIJING, June 17 (Reuters) - China's Sinopec Group is sinking a seventh exploration well in Saudi Arabia to hunt for natural gas, after the previous six found no flows of commercial value, partly due to low gas prices, a company executive told Reuters.

China's second-largest energy group will complete drilling of the last well by about October, but with costs far exceeding an original projection of $300 million, the executive said.

Under a pact sealed in early 2004 with state-run Saudi Aramco, Sinopec agreed to drill seven wells over a contract period of 10 years.

"We are drilling the last well now...One of the previous ones barely struck any gas. The rest found a small amount of flow but with no commercial value, as the agreed gas prices were too low," said the official, who is close to Sinopec's overseas operations.

http://www.reuters.com/article/rbssEnergyNews/idUSPEK10896920090617