CNOOC Signs Second Deepwater Exploration Contract with Husky

CNOOC has inked a petroleum contract with Husky Oil China Limited for deepwater block 29/26 in the Pearl River Mouth Basin of the Eastern South China Sea.

This is the second deepwater exploration contract signed between CNOOC and Husky, and also the seventh contract signed between them.

Block 29/26, one of the 12 deepwater blocks offered by CNOOC in 2002, is located about 300 kilometers southeast of Hong Kong. The block is 3,965 square kilometers in size, in water depth averaging 300 to 2000 meters.

Under the terms of the contract, the exploration period will be divided into three phases. One exploration wildcat is committed respectively during each phase.

Husky will fund 100 percent exploration expenditure and the Company has the right to back in up to 51% working interest at no cost in any commercial discoveries in the block.

Mr. Zhang Guohua, the Senior Vice President of the Company commented, ''We are pleased to see the interest and confidence that Husky showed to the potential of the deepwater block again. At present, a number of foreign companies are still studying the geological data of the deepwater blocks. We believe more partners will be willing to explore the deep water plays in the South China Sea in the future.''