China National Offshore Oil Corporation (CNOOC) has signed two production sharing contracts (PSCs) with SK Innovation for two blocks in the South China Sea.

The two blocks, 04/20 and 17/03, are situated in the Pearl River Mouth Basin.

Block 04/20 covers a total area of 5,138km² and block 17/03 covers a total area of 7,686km².

SK will operate both blocks, which have a water depth of 50m to 100m and are included in CNOOC’s open blocks in offshore China for 2012.

“Both companies will undertake 2D seismic data surveys and will drill exploration wells.”

CNOOC will bear 20% of the costs required for the exploration operations, with SK will bearing the remaining 80%.

Both companies will undertake 2D seismic data surveys and will drill exploration wells.

After entering the development phase, CNOOC will be allowed to participate in up to 60% of the working interest in any commercial discoveries in the blocks.

CNOOC said upon signing the PSCs, it will assign all of its rights and obligations under such contracts, except for those associated to its administrative functions to CNOOC China.

In December 2014, CNOOC signed PSCs with KUFPEC (China) for three blocks in the South China Sea.

The blocks, 52/22, 52/26 and 63/13, are situated in the Yinggehai Basin of the South China Sea.