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CNOOC Limited announced today that its parent company, China National Offshore Oil Corporation (CNOOC), has signed two production sharing contracts (PSCs) with SK Innovation Co., Ltd. (SK) for Blocks 04/20 and 17/03 in the South China Sea.

The two blocks mentioned above are located in the Pearl River Mouth Basin. Block 04/20 covers a total area of 5,138 square kilometers and has a water depth of 50-100 meters. Block 17/03 covers a total area of 7,686 square kilometers and has a water depth of 50-100 meters. Both blocks are included in CNOOC's Open Blocks in Offshore China for the year 2012.

According to the terms of the PSCs, SK shall act as the operator of the two blocks mentioned above. The exploration costs required for the exploration operations will be borne by CNOOC and SK in a proportion of 20% and 80% of participating interest, respectively. Both parties will conduct 2D seismic data surveys and will drill exploration wells. Once entering the development phase, CNOOC  has the right to participate in up to 60% of the working interest in any commercial discoveries in the blocks. After signing the above-mentioned PSCs, CNOOC will assign all of its rights and obligations under such contracts, except for those relating to CNOOC's administrative functions to CNOOC China Limited, a subsidiary of CNOOC Limited.