China National Offshore Oil Company Limited (CNOOC Ltd.) announced Monday that its parent China National Offshore Oil Corporation (CNOOC) has signed a production sharing contract with Singapore Petroleum Company Ltd. (SPC) for a block in the South China Sea.
The 26/18 block, located in China's Pearl River Mouth Basin, covers 4,961 square kilometers and is in waters 85 to 200 meters deep.
Under the terms of the contract, SPC will conduct two-dimensional seismic surveys and exploration drilling.
All costs incurred during the exploration period will be borne by SPC. CNOOC Ltd. is entitled to take an interest of up to 51 percent in any viable discoveries in the block.
The contract for the 26/18 block is the first cooperation project between CNOOC Ltd. and SPC.
Zhu Weilin, vice president of CNOOC Ltd. and general manager of the exploration department, said the company had great interest in exploring the potential of offshore China, so CNOOC could keep a continuous flow of new projects for joint exploration of oil and gas resources.
A circular jointly released by the Ministry of Finance and the General Administration of Customs in July said the government would impose duties on oil exports by foreign partners in offshore oil production if contracts with Chinese partners are signed after Aug. 1.
SPC would be the first foreign company covered by the new regulation, said Xiao Zongwei, a spokesman with CNOOC Ltd.
China already imposes a five percent duty on crude oil exports.
Incorporated in Hong Kong, CNOOC Ltd. is a 70.64-percent owned subsidiary of CNOOC, China's largest offshore oil and gas producer.
(Xinhua News Agency August 6, 2007)
