CNOOC Ltd. said April 12 its parent company, China National Offshore Oil Corp. (CNOOC), has signed a production-sharing contract (PSC) with Smart Oil Investment Ltd. for Bohai 09/17 Block offshore China.

Covering nearly 510 sq km in a water depth between 5 m and 10 m, the block is located in the Qikou sag of the Bohai Bay Basin, CNOOC said in a news release.

According to the terms of the PSC, Smart Oil will serve as operator during the exploration period and conduct exploration activities in the block, paying expenses incurred. When the development phase begins, CNOOC has the right to participate in up to 51% of the participating interest in any commercial discoveries of the block, the release said.

After signing the PSC, except for those relating to CNOOC’s administrative functions, CNOOC will assign all of its rights and obligations under the PSC to CNOOC China Ltd., a subsidiary of CNOOC Ltd., the release said.