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China National Offshore Oil Corporation (CNOOC), China's largest offshore oil corporation, has signed a production sharing contract (PSC) with US-based Devon Energy Corporation for a block in the South Yellow Sea, said sources with CNOOC on Wednesday.

 

The contract for block 11/34 was signed on Tuesday.

 

The block covers a total area of approximately 10,840 square kilometers in the Northern Part of South Yellow Sea Basin. The depth of water at the block ranges from 20 to 60 meters.

 

CNOOC has acquired 2-D seismic data and drilled wells in block 11/34, one of the blocks CNOOC offered publicly in 2005.

 

Under the contract, Devon is committed to conducting a 2-D seismic survey and wildcat drilling during the exploration period. All expenditures used in the course of exploration will be borne by Devon. The China National Offshore Oil Company Limited has the right to participate in up to a 51 percent interest in the event of any commercial discovery in the block.

 

The South Yellow Sea is a new exploration area. CNOOC's cooperation with Devon is expected to bring another win-win project for both companies, said Zhu Weilin, Vice President of CNOOC.

 

This contract is the eleventh between CNOOC and Devon after the two signed a PSC in a deepwater block in South China Sea last December.

 

(Xinhua News Agency February 23, 2006)