(EnergyAsia, July 19 2013, Friday) — China National Offshore Oil Corp (CNOOC Group) and UK major BP said they have signed a production sharing contract (PSC) to jointly develop the 54/11 deepwater block in the South China Sea.

Located in the western part of the Pearl River Mouth Basin, the 4,586-sq km block sits in water depth ranging from 370 to 2,300 metres.

CNOOC will be the PSC operator of the block which is located close to BP’s existing deepwater interests in Blocks 43/11 and 42/05. BP was awarded the two blocks in 2010 and 2011 respectively that are now in the exploration phase.

The companies have not disclosed operating and financial terms of the PSC for all three blocks, although it is known that foreign companies are not allowed to hold a stake exceeding 49%.

Liming Chen, BP China’s President, said:

“This builds on our South China Sea presence creating a strong base for future exploration success for China and for BP.”