By the OGJ Online Staff
LONDON, Oct. 3 -- China National Offshore Oil Corp. (CNOOC) and Taiwan's Chinese Petroleum Corp. (CPC) will sign a letter of intent next week to jointly explore for oil and gas in the Taiwan Strait, the two companies said Wednesday.
CPC Pres. Pan Wen-yen will fly to the mainland to sign the agreement for the project, which will involve seismic testing and drilling in a 15,400 sq km (5,946 sq mile) area between southern Taiwan and Guangdong and Fujian provinces.
"Both sides feel the need for exploration," a CPC spokesman said, adding an initial study showed possible substantial oil and gas reserves.
The two companies will explore the Tainan basin.
CNOOC and government-owned CPC have cooperated in conducting geophysical surveys in the area since 1996, and the new agreement is seen as a sign of strengthening economic ties between China and Taiwan.