China National Offshore Oil Corp. (CNOOC), signed two production sharing contracts (PSCs) with SK Innovation Co., Ltd. (SK) for Blocks 04/20 and 17/03 in the South China Sea.
The two blocks are located in the Pearl River Mouth basin.
Block 04/20 covers a total area of 5138sq km and has a water depth of 50-100m. Block 17/03 covers a total area of 7686sq km and has a water depth of 50-100m. Both blocks are included in CNOOC's Open Blocks in Offshore China for the year 2012.
According to the terms of the PSCs, SK shall act as the operator of the two blocks. The exploration costs required for the exploration operations will be undertaken by CNOOC and SK in a proportion of 20% and 80% of participating interest, respectively.
Both parties will conduct 2D seismic data surveys and will drill exploration wells. Once entering the development phase, CNOOC has the right to participate in up to 60% 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.