China National Offshore Oil Corporation (CNOOC), has signed three production sharing contracts (PSCs) with KUFPEC (China) Inc. for Blocks 52/22, 52/26 and 63/13 in the South China Sea.
The three blocks are located in the Yinggehai Basin of the South China Sea. Block 52/22 covers a total area of 1,896 square kilometers, and has a water depth of 60-300 meters; Block 52/26 covers a total area of 1,783 square kilometers, and has a water depth of 80-160 meters; Block 63/13 covers a total area of 698 square kilometers, and has a water depth of 80-140 meters.
According to the terms of the PSCs, CNOOC will act as the operator of the three blocks. Expenditures incurred during the exploration period will be borne by CNOOC and KUFPEC in a proportion of 20% and 80% of participating interest, respectively. Both parties will conduct 3D seismic data surveys and will drill exploration wells.
Once the two companies enter the development phase, CNOOC has the right to participate in up to 70% of the working interest in any commercial discoveries in the blocks. After signing the PSCs, CNOOC will assign all of its rights and obligations under such contracts, except for those relating to CNOOC’s administrative functions, to CNOOC China Limited, a subsidiary of CNOOC Limited.