China National Offshore Oil Corporation (CNOOC) announced Tuesday that it has entered into a new production sharing contract in the South China Sea with US-based Newfield Exploration Company (Newfield).

The contract for block 17/08 was signed on Monday.

Located about 180 kilometers offshore Hong Kong in the Pearl River Mouth Basin of the Eastern South China Sea, block 17/08 covers a total area of approximately 7,108 sq km with a water depth ranging from 150 to 350 meters.

Newfield is committed to conducting a 3-D seismic survey and wildcat drilling during the exploration period.

Under the terms of the contract, all expenses during the exploration period will be borne by Newfield.

CNOOC has the right to participate in up to a 51 percent interest in the event of any commercial discovery in the block.

In addition, a geophysical survey agreement has been signed between the parties on block 16/05.

The block, with an area of 2,064 sq km, is also located in the same basin. According to the agreement, Newfield will acquire 3-D seismic data within the block.

CNOOC is China's largest offshore oil producer.

Source: Xinhua