China National Offshore Oil Corporation (CNOOC) has signed a production sharing contract (PSC) with Husky Oil Operations (China) for a new exploration block in the South China Sea.
Covering a total area of 44km² in depths of 100m, the new Block 16/25 is situated in the Pearl River Mouth Basin, nearly 150km south-east of the Hong Kong Special Administrative Region.
Under the PSC, Husky will assume operatorship of the block during the exploration period with 100% working interest and have responsibility for conducting an exploration campaign in Block 16/25.
All expenditure in this exploration programme will be incurred by Husky.
CNOOC is entitled to assume a participating interest of up to 51% during the development and production phase, if Husky makes any commercial discovery during exploration.
Following execution of this PSC agreement, except for those relating to CNOOC’s administrative functions, the company will assign all of its rights and obligations under PSC to CNOOC China.
Husky has planned to drill two exploration wells in the shallow water block during the 2018 timeframe, together with two planned exploration wells at the adjacent exploration Block 15/33.
Headquartered in Calgary in Alberta, Husky operates in western and Atlantic Canada, US and the Asia Pacific Region across upstream and downstream business segments.
Image: Husky Energy headquarters. Photo: courtesy of Surrealplaces at English Wikipedia.