CNOOC Ltd. reports that its parent company, China National Offshore Oil Corp. (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.
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 entering 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 Ltd., a subsidiary of CNOOC Ltd.