CNOOC Inks New PSC with Newfield

CNOOC Limited has entered into a new production sharing contract (PSC) for block 17/08 in the Pearl River Mouth Basin of the Eastern South China Sea with Newfield Exploration Company.

Block 17/08 is located about 180 kilometers offshore Hong Kong. It covers a total area of 7,108 square kilometers with water depth ranging from 150 to 350 meters.

Newfield is committed to conduct 3-D seismic survey and wildcat drilling during the exploration period, which is divided into 3 phases. Under the terms of the contract, all expenditures incurred during exploration period will be borne by Newfield. CNOOC Ltd. has the right to participate in up to a 51% interests in the event of any commercial discovery in the block.

In addition, a Survey Agreement has been signed between the parties on block 16/05. The block, with an area of 2,064 square kilometers, is also located in the same basin. According to the Survey Agreement, Newfield will acquire 3-D seismic data within the block.

Mr. Zhu Weilin, Vice President of the Company and General Manager of exploration department commented, "I am pleased to know that Newfield has entered into a PSC contract for block 17/08 and a Survey Agreement for block 16/05 with CNOOC. Hope they will achieve great success in the exploration in Pearl River Mouth Basin."