JV to acquire 51% WI in Block 63/16 offshore South China Sea.
China National Offshore Oil Corp., Hong Kong, (NYSE: CEO) has signed a production sharing contract with BG International Ltd., a subsidiary of BG Group Plc, Reading, U.K., (London: BG) to develop Block 63/16, offshore China's Hainan Island in the western portion of the South China Sea.
The block covers approximately 1,013 square miles in the Qiong Dong Nan Basin, with water depth ranging from 295 to 541 feet. Under the terms of the contract, BG Group will conduct 3-D seismic survey and exploration drilling and will bear all expenditures incurred during the exploration period. CNOOC has the right to participate in up to a 51% working interest in any commercial discoveries in the block.
The two companies have partnered before in the area, signing production sharing contracts for blocks 64/11 and 53/16 and a geoscientific study agreement for block 41/06 in 2006.