China National Offshore Oil Corp. (CNOOC) signed production sharing contract (PSC) with Shell China Exploration and Production for Block 35/10 in Yinggehai Basin, west of the Hainan Island, China, in the South China Sea.
Block 35/10 covers a total area of 3,427sq km with water depths between 80-110m.
According to the terms of the PSC, Shell will conduct 3D seismic data survey and may drill exploration wells in the block during the exploration period, and cover all expenditures.
This is the third offshore oil and gas PSC Shell and CNOOC have signed in the Yinggehai Basin following the signing of PSCs 62/02 and 62/17 in July 2012. Shell will hold a 100% working interest during the exploration phase. In any eventual development phase, Shell will hold 49% interest and CNOOC 51%.
Shell announced that the two companies have also signed a memorandum of understanding (MOU) to jointly explore potential cooperation opportunities in the strategic areas of mutual interest and benefit in China and internationally.