Chevron and China’s state-run oil company CNOOC will jointly explore for oil in the South China Sea under new production sharing contracts, the companies said Wednesday.
Chevron will conduct exploration over 2,233 square miles of the South China Sea, including initial work to collect 3D seismic surveys over the area, according to the companies.
Chevron, the second-largest U.S. oil company, will have a 100 percent interest in any discoveries, although CNOOC will have the option to buy back up to a 51 percent stake, the companies said.
Chevron will cover the costs of operations on the two CNOOC-owned offshore blocks, in water depths ranging from about 160 feet to 330 feet.
“Exploration of these blocks builds on our strategy to grow our business across the Asia Pacific region, where we are developing LNG, deepwater, shale and sour gas resources,” George Kirkland, vice chairman of Chevron, said in a statement.
In China, Chevron is working as the operator on projects through four other production sharing contracts. It is working onshore in the natural gas fields of the Sichuan Basin and also has operator interests in three deepwater blocks in the South China Sea where Chevron is exploring about 7,500 square miles.
“We are very pleased to become partner with Chevron again and wish this project to achieve commercial discoveries soon to create economic returns for both companies, “ Zhu Weilin, executive vice president of CNOOC, said in a statement.