Jan 16 Chevron Corp has signed
production-sharing contracts with CNOOC Ltd for two
exploration blocks in the South China Sea, expanding its
presence in the prospective oil and gas region even after
drilling three dry holes there last year.
Through its deal with the Chinese offshore oil firm, Chevron
will own and operate the shallow-water blocks that cover about
2,233 square miles in the Pearl River Mouth Basin, the
second-largest U.S. oil company said on Wednesday.
Exploration of the blocks was part of Chevron's plan to
expand in the Asia Pacific region, where it is developing
liquefied natural gas projects as well as deepwater, shale and
sour gas resources, Chevron Vice-Chairman George Kirkland said.
The San Ramon, California-based company will fund and
conduct 3D seismic data surveys in the blocks during the
Chevron has stakes in several exploration areas in China as
well as operating interests in three deepwater blocks in the
South China Sea, where it drilled the dry holes last year.
A top Chevron executive said last year that some of the
results of that drilling were "encouraging" and would be used to
help with site selection for a follow-on drilling program.
Chevron shares were up 0.6 percent at $114.14 in afternoon
trading on the New York Stock Exchange.
CNOOC has the right to take an interest of up to 51 percent
should oil be found in commercial quantities in the blocks, the
Chinese company said in a statement.
China is engaged in disputes with neighbors, including the
Philippines, Taiwan, Vietnam, Brunei and Malaysia, over claims
to parts of South China Sea.