The nation's third largest oil producer, China National Offshore Oil Corp (CNOOC), yesterday signed agreements with Texas American Resources Company (TARC) to explore two offshore areas in the eastern South China Sea.
The two companies signed a production sharing contract for Block 03/27 and a geophysical agreement for Block 28/20. Under the terms of the agreement, TARC will fund all the exploration costs and CNOOC will have a 51 percent share in the development and production of the areas after any commercial discoveries, a TARC statement said.
Block 03/27, located in the Pearl River estuary basin, covers a total area of 10,569 square kilometres, with water depth ranging from 50 to 100 meters.
The other block, with an area of 7,625 square kilometres, is also located in the same area.
"The signing of the agreements is a good start. We sincerely hope that TARC, with its expertise and management skills, will be successful," said Zhu Weilin, CNOOC's vice-president and general manager of its exploration department.
CNOOC, which has a monopoly in China's offshore oil sector, is stepping up efforts to tap reserves to boost production.
The oil giant earlier this month announced it had made a new discovery in Bohai Bay, in an area called Luda 27-1.
Also in the same bay, CNOOC last month said an oilfield began production. It is able to produce approximately 3,200 barrels of oil per day from its nine wells.
CNOOC said it plans to double oil production within the next five years. The company produced 64.6 million barrels of oil in the first half of this year.
US-headquartered TARC, which established its Beijing office in May, said this is its first concrete project in China.
"The signing of the two agreements mean TARC has made significant improvements in its partnership with China," David Honeycutt, president of TARC, said in a statement.
The project with CNOOC was based on the assessment of more than 10 potential projects, both offshore and onshore, TARC said.
TARC, formed in 1990, is an Austin-based independent private oil company.
(China Daily October 19, 2005)