China National Offshore Oil Corp. (CNOOC) and Kuwait Foreign Petroleum Exploration Co. (KUFPEC) signed three production sharing contracts (PSC) for Blocks 52/22, 52/26, and 63/13 located in the Yinggehai basin, in the South China Sea.
According to the terms of the PSCs, CNOOC will be the operator of the three blocks. Expenditures incurred during the exploration period will be accepted 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.
Block 52/22 covers a total area of 1896sq km, and has a water depth of 60-300m; Block 52/26 covers a total area of 1783sq km, and has a water depth of 80-160m; Block 63/13 covers a total area of 698sq km, and has a water depth of 80-140m.