CNOOC and Kerr-McGee Sign New Exploration Contract

abarrelfullabarrelfull wrote on 27 Aug 2014 08:58

June 18, 2003

CNOOC Limited (the "Company", SEHK: 883, NYSE: CEO) announced today that its parent — China National Offshore Oil Corporation ("CNOOC") has signed a production sharing contract (PSC) in Bohai Bay with Kerr-McGee China Petroleum Ltd. ("Kerr-McGee"), an affiliate of Kerr-McGee Corp. (NYSE: KMG).

The PSC covers Block 09/06 which is located in the western part of Bohai Bay. It has a total exploration area of about 1,788 square kilometers. Kerr-McGee is committed to drilling one wildcat well in the first contract phase with an option to commit to additional wells in subsequent phases.

"Oil companies continue to be attracted by Bohai Bay prospects and they remain active there," said Mr. Zhang Guohua, the new exploration chief of the Company.

"We welcome and expect continued exploration interests offshore China under our PSC regime. We are committed to attracting international petroleum companies such as Kerr-McGee in searching for oil and gas offshore China. It is a win-win formula," commented Mr. Cao Yunshi, the General Counsel and Senior Vice President of the Company.

Under the terms of the PSC, Kerr-McGee will fund 100% of the exploration expenditures. CNOOC Limited has the right to co-invest up to a 51% participating interest in developing any commercial discoveries in the block.

Kerr-McGee also holds interests and operates three other PSCs in Bohai Bay.

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