US-based energy company Chevron said its subsidiary Chevron China Energy Company has signed production sharing contracts (PSC) with China National Offshore Oil (CNOOC), for two exploration blocks in the Pearl River Mouth Basin in the South China Sea.
As a part of the deal, Chevron China Energy will acquire 100% interest in blocks15/10 and 15/28 in the Pearl River Mouth Basin.
The two blocks will cover a total area of about 2,233 square miles, or 5,782 square kilometres.
CNOOC, however, can participate in about 51% working interest, during any commercial discoveries in the blocks, as part of the deal.
During the exploration period, Chevron will carry out 3D seismic data surveys in the two shallow water blocks and will bear the entire cost related to the survey.
Chevron already holds interests in many exploration blocks in China, as well as operating stakes in three deepwater blocks in the South China Sea, where it drilled the dry holes in 2012, reported Reuters.
Chevron vice chairman George Kirkland said that exploration of the two blocks is a part of the company’s strategy to grow its business in the Asia Pacific region, where the company is developing LNG, deepwater, shale and sour gas resources.
Chevron Asia Pacific Exploration and Production president Melody Meyer said: "We welcome the opportunity to partner with CNOOC and apply our industry-leading exploration capabilities in the prospective Pearl River Mouth Basin."
Image: Pearl River, Guangzhou. Photo courtesy of Daniel Berthold.