Operational Review (continued)In 1997, <strong>Cairn</strong> plans to drill an exploration well to test a 600 Bscf prospect,There are attractive market opportunities for gas-fired power generation inthe area.ChinaExploration and Appraisal<strong>Cairn</strong> has a 100% interest in Block 23/10 located in the Beibu Gulf,offshore southern China. This block covers an area of 2,945 km2 andcontains the 16-1 -1 discovery well, which <strong>report</strong>edly flowed at rates ofup to 4,000 bopd on test.In March 1997. <strong>Cairn</strong> started shooting a 1,500 km marine seismic surveyover the block and plans to drill an exploration well in late 1997 or early1998. Prospect sizes range from 50 to 100 MMbbls.In <strong>1996</strong>, <strong>Cairn</strong> also acquired 100% interests in each of Blocks 15/35and 15/26, located in the Pearl River Basin, offshore southern China.Two exploration wells are planned for early 1998. Prospect sizes rangefrom 50 to 150 MMbbls.VietnamAn exploration well drilled on the Vai prospect in offshore Block 17discovered oil, but tested only at sub-commercial rates. The well wasplugged and abandoned and the block is expected to be relinquished.EuropeUnited KingdomProduction and DevelopmentThe Group's <strong>1996</strong> average UK offshore production increased to 3,773 bopd(1995: 2,531 bopd).In onshore Southern England, <strong>Cairn</strong>'s producing oil fields are in naturaldecline. Average onshore production declined to approximately 1.820 bopd(1995: 2,325 bopd). Development of the onshore Storrington oil field awaitsfull approval from Government and planning authorities.Exploration and AppraisalDuring 1997, the Group expects to participate in two exploration wells inthe UK offshore.NetherlandsProduction and DevelopmentThe Group's <strong>1996</strong> Netherlands production averaged 2,031 boepd (1995:1,950 boepd). Gas prices increased by an average of 16% over 1995prices. During the year gas compression facilities were installed on theMarkham platform and these will permit considerable flexibility in processingthird party gas through Markham.Exploration and AppraisalIn <strong>1996</strong>, the Operator drilled an unsuccessful exploration well on theJ/6 South prospect. A P/6 appraisal well, designed to test the deep gaspotential in the low permeable Rotliegendes reservoir, is currently drilling.This structure, based on the 1968 discovery well, is estimated to containup to 750 Bscf of gas in place (Group share 73 Bsct).European RussiaProduction and DevelopmentFollowing the Command acquisition, the Group increased its share inSOCO Perm to 21.16%. SOCO Perm owns a 50% interest in the Permtexjoint venture which produces and exports oil from the Perm area ofEuropean Russia.
North AfricatMiddle EastTunisiaCommand had two interests in Tunisia. The small offshore Didon and Zaratfield developments are proceeding. The Group intends to withdraw from theonshore Fejaj permit following the drilling of an unsuccessful exploration well.YemenThe Group holds an indirect 11.785% interest in the onshore East ShabwaContract Area, located in Southern Yemen approximately 370 km north-eastof Aden.USAA well drilled on Ship Shoal Block 251 in the Gulf of Mexico, in Febmary<strong>1996</strong>, was plugged and abandoned.i Signature of the Sangu gas contract. 11 January 1997. Those present includethe Prime Ministers of kladesh and the UK, the Banaladesh Minister ofi <strong>Energy</strong>, tne Seuetary of thE. Minmy of <strong>Energy</strong>, the Cnaman ofi PetroBangla, arc Ock Cneney, former JS Defence Secretary now Cnairmani and Chief Executive of HERAcreage rationalisation and disposalsThe rationalisation of the Group's UK North Sea acreage continued withthe withdrawal from Block 22113b and disposal of its 0.5% interest in theForties field. In Australia. Skua production ended early 1997.i Offices of Command in India, the base for the Rawa project team.Report 15 1