CNOOC, SK Innovation Sign PSCs For Blocks 04/20 & 17/03 In South China Sea

(RTTNews) - CNOOC Ltd. (CEO, CNU.TO) said its parent company, China National Offshore Oil Corp. or CNOOC, has inked two production sharing contracts or PSCs with SK Innovation Co., Ltd. for Blocks 04/20 and 17/03 in the South China Sea.

These two blocks are situated in the Pearl River Mouth Basin. Block 04/20 covers a total area of 5,138 square kilometers and has a water depth of 50-100 meters. Block 17/03 includes a total area of 7,686 square kilometers and has a water depth of 50-100 meters. Both blocks are included in CNOOC's Open Blocks in Offshore China for the year 2012.

As per the terms of the PSCs, SK shall act as the operator of the two blocks mentioned above. The exploration costs required for the exploration operations would be borne by CNOOC and SK in a proportion of 20% and 80% of participating interest, respectively. Both parties would conduct 2D seismic data surveys and will drill exploration wells. Once entering the development phase, CNOOC has the right to participate in up to 60% of the working stake in any commercial discoveries in the blocks.

After signing these PSCs, CNOOC would assign all of its rights and obligations under such contracts, except for those relating to CNOOC's administrative functions to CNOOC China Ltd., an unit of CNOOC Ltd.