Primeline Energy Holdings has entered into a production sharing contract (PSC) with China National Offshore Oil Corporation (CNOOC) for Block 33/07, located in the East China Sea.
The contract replaces the petroleum contract on Block 25/34, under which CNOOC was operator with a 51% interest and Primeline held a 36.75% stake.
Primeline Energy Operations International is operator of Block 33/07 and is responsible for 100% of exploration costs, while CNOOC has the right to participate, up to 51%, in any commercial development.
The new contract has a seven-year exploration period divided into three exploration phases, each with a minimum work commitment.
The firm commitment in the first phase is for two exploratory wells and 600 square kilometres of 3D seismic.
Any discoveries in the new contract area have the right to use the production facilities being built for the LS36-1 gas field.
Primeline has 737 square kilometres of 3D seismic data in the block, within which a number of potential prospects near LS36-1 have been mapped.
Zhu Weilin, CNOOC executive vice president, commented: "This is the fourth petroleum contract that Primeline has signed with CNOOC and it is signed at a time when our first gas field development is progressing very well. We value our relationship with Primeline and expect great results from our cooperation."