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On September 21, CNOOC published an article on its official website stating that CNOOC’s subsidiary CNOOC Development, together with Meidian Energy Technology (Shanghai) Co., Ltd. (hereinafter referred to as Meidian Company), jointly established CNOOC Development Meidian Deepwater Systems Co., Ltd. The company is focused on developing core system equipment for oil and gas exploration and extraction in marine deep waters. People close to CNOOC told reporters from the Daily Economic News that Meidian Group, the parent company of Meidian Company, has certain advantages in deep-water exploration technologies. It initiated cooperation with CNOOC at the end of last year, which aligned well with CNOOC’s desire to develop its capabilities in deep-water exploration. Li Li, director of energy research at Anxunsix, believes that amid the current low oil prices and the difficult operating conditions faced by oil and gas companies, a partnership between US Drill Company and CNOOC can help them support each other ； Under low oil prices, deep-sea exploration activities suffer the most severe contraction; therefore, new companies will need high oil prices to drive decent growth in the future. CNOOC makes progress in its reform efforts. CNOOC stated on its official website that the joint venture, as a hybrid enterprise formed by a state-owned enterprise and a private company, will focus on developing core systems and equipment for oil and gas exploration and drilling in deep-sea areas. According to available information, Meidian Group is primarily engaged in the research and development, design, production, and engineering technical services related to high-end oil and gas drilling and production equipment for both land and marine use. Its subsidiary, Meidian Oil Drilling Systems (Shanghai) Co., Ltd., is a wholly foreign-owned enterprise registered in Shanghai; it is a supplier of oil drilling and production equipment in China and maintains partnerships with all three major oil companies in the country. According to people close to CNOOC, the cooperation between CNOOC and MD Group was initiated by MD Group last year. “MD Group has certain technical capabilities in deep-sea exploration, and CNOOC also wishes to develop its capabilities in deep-water exploration; that’s why the two parties entered into a partnership.” Deep-sea oil exploration is difficult, requires high levels of technology, and involves substantial investment; as a result, in recent years the technologies and equipment needed for deep-sea exploration have been largely monopolized by Western developed countries. Data shows that the United States accounts for 70% of the world’s total deep-sea drilling equipment, while the UK and Norway achieve 80% self-sufficiency in terms of drilling platforms. The design companies specializing in semi-submersible and ship-based drilling platforms required for deep-water oil drilling are also mainly located in Europe and the United States. CNOOC believes that for a long time, China’s deep-water drilling and production equipment for offshore oil and gas exploration has been monopolized by Western countries, which has hindered the development of offshore economic activities. In recent years, through cooperation with Halliburton, CNOOC has achieved a series of results in terms of core technologies related to deep-water drilling and production for offshore oil and gas. Han Xiaoping, the chief information officer of China Energy Network, said that deep-sea equipment has long been controlled by foreign companies. The cooperation between CNOOC and private enterprises will result in advantages in terms of equipment prices. “Private enterprises like Meidian Company possess strong innovation capabilities and are good at cost control; partnering with state-owned enterprises through a mixed-ownership model can make new companies more flexible. ”Han Xiaoping analyzed that, \"Currently, many deep-sea operations in ** do not allow other state-owned enterprises in ** to participate, so establishing a joint venture will also be helpful for future development of overseas business.\" ” The short-term prospects remain unclear. Li Li believes that, given the current low oil prices, the cooperation between US Diamond and CNOOC can help them support each other, but their future development prospects will only become apparent once oil prices recover. Industry experts say that the cost of deep-sea oil extraction is extremely high; the cost of drilling a deep-sea oil well can exceed 100 million dollars, while the construction cost of deep-water oil platforms is also over 1 billion dollars. The daily operating costs for maintaining such platforms amount to millions of dollars as well. “With current low oil prices, deep-sea exploration is difficult to sustain; therefore, it is hard to determine the company’s short-term prospects. Since the sharp drop in oil prices last year, oil and gas companies around the world have cut back the most on exploration in deep seas. ”Li Li analyzed. Han Xiaoping believes that although oil prices are currently low, the investment cycle for deep-sea oil exploration and extraction is also long; therefore, the cooperation between CNOOC and US Oil is an investment in the potential rise in oil prices in the future. Despite the challenges faced in deep-sea exploration at present, industry experts say that China is exceptionally rich in deep-sea oil and gas resources. The development of deep-sea exploration and extraction by CNOOC will be of great significance for achieving energy self-sufficiency in the country. In recent years, China’s dependence on imported crude oil has continued to rise, making energy self-sufficiency an important issue in domestic energy planning. In the \"Energy Development Strategy Action Plan (2014–2020)\") released in 2014, \"enhancing the country’s capacity for self-sufficient energy supply\" was listed as one of the key tasks of China’s energy strategy for the 13th Five-Year Plan period. “In the long term, as it is difficult to maintain rapid growth in the overall production of onshore oil fields, the increase in China’s crude oil production will primarily come from offshore sources. CNOOC, which holds the upper hand in offshore exploration, will also be the main driver of growth in domestic crude oil extraction. ”Li Li said. Employees of CNOOC Shenzhen Branch said that despite low oil prices, CNOOC’s strategic goal of advancing into deeper seas remains unchanged. “CNOOC’s Shenzhen branch established a deep-sea operations company last year, and it is now producing resources in deep seas as well; however, low oil prices have led CNOOC to halt new drilling activities at its drilling platforms in the deep waters of the South China Sea. ”