Cnooc, Husky Sign South China Sea Block Contract

Chinese Cnooc has signed a production sharing contract (PSC) with Canadian Husky for Block 16/25 in the South China Sea.

Block 16/25 is located in the Pearl River Mouth Basin, about 150 kilometres southeast of Hong Kong. The block covers a total area of 44 km² with a water depth of 100 meters, Cnooc said April 14.

According to the terms of the PSC, Husky shall act as the operator during the exploration period and conduct exploration activities in the block, in which all expenditures incurred will be borne by the Canadian firm. Once entering the development phase, Cnooc said it has the right to participate in up to 51% of the participating interest in any commercial discoveries of the block.

Husky in a separate statement said it expects to drill two exploration wells on the shallow water block during the 2018 timeframe, in conjunction with two planned exploration wells at the nearby exploration Block 15/33.

Shardul Sharma