BP to explore third deepwater South China Sea block with Cnooc

BP Plc (BP/), Europe’s second-largest oil company, signed a deal for a third block in the South China Sea with Cnooc Ltd. (883), the country’s biggest offshore explorer.

BP agreed to explore the 54/11 block in the Pearl River Mouth Basin with Cnooc as operator. The license, covers 4,586 square kilometers (1,770 square miles) in water depths from 370 meters (1,200 feet) to 2,300 meters, and is close to two other deepwater blocks where BP operates, the London-based company said today in a statement.

“This is a good addition of acreage to our deepwater portfolio in the South China Sea and deepens our close relationship with Cnooc,” said Mike Daly, BP’s executive vice president for exploration. “We look forward to some early results.”

The deal bolsters BP’s presence in China as demand for energy increases in the world’s second-largest economy. BP has invested about $5 billion in the country in deepwater exploration, chemicals, manufacturing and other businesses.

The terms of the deal weren’t disclosed.