China National Offshore Oil Corporation (CNOOC) announced today that it has signed a production sharing contract (PSC) with Eni for Block 50/34 in the South China Sea.
Block 50/34 encompasses an area of 2000sq km in the Qiongdongnan Basin of offshore Hainan Island. According to the terms of the contract, Eni will conduct 3D seismic surveys and drill exploration wells in Block 50/34 during the 3-phase, 6.5 year exploration period.
All expenditures incurred during the exploration period will be borne by Eni. CNOOC Ltd. has the right to participate in up to 51% working interest in any commercial discoveries in the block.
The block was offered for foreign cooperation by CNOOC in 2012, the joint venture provides the Chinese firm with the capital support it has sought, while also contributing to Eni’s efforts of increasing the company’s presence in China.