CNOOC enters pact with South Korean firm for South China Sea block
China National Offshore Oil Corporation (CNOOC) has signed a production sharing contract (PSC) with SK Innovation Co., Ltd. (SK) for Block 17/08 in the South China Sea.
CNOOC is a parent company of CNOOC Limited, China’s offshore oil and gas producer. SK Innovation is a South Korean oil refining company, engaging in the development of oil projects worldwide.
Block 17/08 is located in the Pearl River Mouth Basin and it covers a total area of 466 square kilometers with a water depth of 100-130 meters.
According to the terms of the PSC, SK will act as the operator during the exploration period and conduct exploration activities in the block, in which all expenditures incurred will be borne by SK.
Once the development phase is entered into, CNOOC has the right to participate in up to 51% of the participating interest in any commercial discoveries of the block.
After signing the PSC, except for those relating to CNOOC’s administrative functions, CNOOC will assign all of its rights and obligations under PSC to CNOOC China Limited, a subsidiary of CNOOC Limited.