Cnooc Ltd. (883), China’s biggest offshore energy producer, and Eni SpA (ENI), Italy’s largest oil company, agreed to expand exploration in the South China Sea.
Cnooc’s parent, China National Offshore Oil Corp., signed a production-sharing contract with Eni for the deepwater Block 30/27, the Beijing-based company said today in a statement. Eni will conduct a seismic survey of the area and drill a well.
“All expenditures incurred during the exploration period will be borne by Eni,” Cnooc said. The Chinese company “has the right to participate in up to 51 percent working interest in any commercial discoveries in the block.”
The block is 400 kilometers (250 miles) off Hong Kong and covers 5,130 square kilometers in an “attractive” deepwater area with “high” exploration potential, Eni said in a statement on its website.
The Rome-based company, active in China since 1984, is working at three other blocks in the South China Sea. It’s examining opportunities for shale-gas exploration in the country with China National Petroleum Corp. and China Petroleum & Chemical Corp. (600028)
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