The China National Offshore Oil Corporation (CNOOC) and Kerr-McGee China Petroleum Limited Friday (Feb 4th) signed an oil exploration contract for deepwater block 43/11 in the Pearl River Mouth Basin of South China Sea. 

According to Zhang Guohua, senior vice president of CNOOC, block 43-11 is located about 350 kilometers southeast of Hong Kong. The block is 9,729 square kilometers in size, and 1,500 to 3,000 meters deep.

This is the first deepwater exploration contract signed between CNOOC and Kerr-McGee, and also the eighth oil contract between the two companies.

Under the contract, Kerr-McGee will fund 100 percent exploration expenditure in the first phase of the exploration period. And CNOOC has the right of up to 51 percent working interest in any commercial discoveries in the block.

Michael L. Verm, vice president of Kerr-McGee China Petroleum Ltd, said that his company will take advantage of its advanced technologies and expertise in deepwater exploration and deepen cooperation with CNOOC.

He said this is Kerr-McGee's first deepwater exploration contract with CNOOC, and it more than doubles his company's exploration acreage in China to 4.1 million acres.

The vice president noted that Kerr-McGee's success in cooperation with China is marked by eight oil and gas discoveries in the Bohai Bay and the development of two oilfields that came online in July 2004.

He stressed that these achievements were the result of teamwork, commitment and sharing of expertise, and Kerr-McGee expects more cooperation with CNOOC.

In the Bohai Bay, production from Kerr-McGee-operated CFD 11-1 and CFD 11-2 oilfields on block 04/36 currently ranges from 40,000 to 45,000 barrels of oil per day. And the development of the Kerr-McGee-operated CFD 11-3 and CFD 11-5 oilfields on block 04/36 is in the final approval stages for operation.

Editor: Wing