(EnergyAsia, December 2 2011, Friday) — Canada’s Nexen Inc said it and CNOOC Limited have agreed to a joint venture giving the Chinese firm a working interest in up to six deepwater exploration wells in the Gulf of Mexico.

The agreement covers the Kakuna well, which is being drilled, and the Angel Fire well, which is due to be spudded next year. CNOOC Limited, China’s largest offshore oil and gas producer, will have a 20% working interest in Kakuna, Angel Fire and Cypress, and will have the option to participate in the other three wells with a 10% to 25% interest.

Nexen said the venture does not include any interest in its Appomattox discovery, containing at least 250 million barrels of contingent recoverable oil or related Norphlet formation prospects. The Calgary, Alberta-based company holds a 20% interest in Appomattox, with operator Shell owning the rest.

Marvin Romanow, Nexen’s President and CEO, said:

“This agreement is the culmination of an extensive process to recognize some of the value our exploration team has created in the Gulf of Mexico. We are seeing a gradual return to normal activity in the Gulf and this deal is a reflection of the fact that the basin remains a very exciting one for deepwater exploration prospects.

“Nexen’s strategy in the Gulf of Mexico is to mature prospects at a high working interest, and then utilise joint venture agreements like this one to reduce our interest to our target level of 25%-30%, while recognising the potential of our exploration portfolio.”

Nexen said it currently produces around 20,000 b/d of oil equivalent per day in the Gulf of Mexico, where it is one of the top deepwater leaseholders.