CNOOC revises deepwater block terms

China National Offshore Oil Corp. (CNOOC) has amended agreements to production-sharing contracts for three deepwater blocks in the South China Sea.

Offshore staff

HONG KONG -- China National Offshore Oil Corp. (CNOOC) has amended agreements to production-sharing contracts for three deepwater blocks in the South China Sea.

The agreements, involving Chevron China, BP China, and Devon Energy, concern blocks 42/05, 64/18, and 53/30. All have been approved by the Chinese government.

In 2005 and 2006, CNOOC signed three PSCs with Devon for the blocks. Subsequently, Chevron and BP signed sale and purchase agreements with Devon as follows: Chevron acquired a 59.18% interest in block 42/05 and a 100% interest in blocks 64/18 and 53/30 in the exploration phase as well as Devon’s remaining interest in block 42/05.

The latter, in Baiyun Sag of the Pearl River Mouth basin in the Eastern South China Sea, covers an area of 6,939 sq km (2,679 sq mi). Blocks 64/18 and 53/30 are in the Qiong Dong Nan basin in the Western South China Sea with respective acreage of 7,712 sq km (2,977 sq mi) and 6,313 sq km (2,437 sq mi). Water depth across the three blocks varies from 300-2,000 m (984-6,561 ft).

Chevron will operate all three blocks during the exploration period, but CNOOC has the right to participate in up to a 51% interest in the event of any commercial discovery.

Zhu Weilin, executive vice president of CNOOC and general manager of the Exploration Department said, “We welcome Chevron and BP to become our new partners in these blocks and look forward to the joint exploration of the great deepwater potential in the South China Sea.”

9/07/2010

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