The landmark demonstrates China’s drive to develop its own oil and gas resources at the same time as it buys into developments around the world.
It also shows the enthusiasm of top international oil companies like BP, Shell and Exxon Mobil to deepen ties with the world’s fastest-growing oil market and consumer of over 10 percent of world supplies.
The deal relates to block 54/11 in the deepwater Pearl River Mouth Basin, which covers 4,586 square kilometres in water depths from 370 to 2,300 metres, and is close to BP’s existing deepwater interests in Blocks 43/11 and 42/05.
CNOOC will be the operator and will own the rights to 51 percent of any commercial discoveries, but BP will carry the cost of exploration. Financial terms were not disclosed in statements from BP and CNOOC’s Hong Kong-listed subsidiary CNOOC Ltd <0883.HK>.
“This is a good addition of acreage to our deepwater portfolio in the South China Sea and deepens our close relationship with CNOOC. We look forward to some early results,” said Mike Daly, BP’s executive vice president for exploration.
*Andrew Callus; Editing by David Holmes, Reuters