Shell in New PSC with CNOOC for South China Sea Oil, Gas Block

Oil major Royal Dutch Shell and China's CNOOC Ltd announced a new production sharing contract on Thursday to explore for oil and gas in an offshore block in the South China Sea.

Block 35/10, in the Yinggehai Basin west of Hainan Island in southern China, covers a total area of 3,427 square kilometres with water depth of 80-110 meters, the companies said.

Shell would conduct 3D seismic data surveys and may drill exploration wells during the exploration period. Shell will bear all the cost during the exploration phase, while CNOOC has the right to back in with a 51% interest in development stage.

A year ago, Shell entered a deal with CNOOC to explore another two blocks in the same basin.

(4-traders.com, edited by Topco)