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Chinese companies sign deepwater exploration pact

11th April 2012

Major national Chinese oil corporation to partner with exploration firm to explore a deepwater bloc in the South China Sea.

Several deltas in the South China Sea are rich in oil and gas deposits

China National Offshore Oil Corporation (CNOOC) has signed a production sharing contract (PSC) with Eni China B.V. for a deepwater block in South China Sea, it announced on 11 April.

The block “30/27” is located 400 KM off the coast of Hong Kong with a total area of 5,130 KM sq and is one of the blocks CNOOC offered for foreign cooperation in 2011.

According to the terms of the contract, Eni will conduct 3D seismic survey, drill one exploration well in the area and cover the full costs of the exploration operation.

CNOOC Limited has the right to participate in up to 51 per cent working interest in any commercial discoveries in the block.

Zhu Weilin, Enu executive vice president and general manager of exploration department said: "Oil and gas resources are rich in the deepwater South China Sea and are one of the main sources for the company's medium and long term development”.

Eni also has equity interest in two other blocks – 16/08 and 16/19 – located in the South China Sea and is already operating in block 28/20.

It has been operating in China since 1984 and has a current hydrocarbon production rate of approximately 10,000 barrels of oil equivalent per day.

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