JOINT VENTURE TO EXPLORE IN MAINLAND CHINA

A joint venture in which Nomeco China Oil Co. is a member has signed a contract with state owned China National Oil Development Corp. (Cnodc) for exploration, development, and production in China's Dongting basin. Nomeco China officials believe it to be the first contract issued to non-Chinese for exploration on the Chinese mainland. The area covered by the agreement was the focus of an earlier attempt at mainland China exploration by a U.S. company.

Dec. 24, 1990

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Nomeco China officials believe it to be the first contract issued to non-Chinese for exploration on the Chinese mainland. The area covered by the agreement was the focus of an earlier attempt at mainland China exploration by a U.S. company.

The joint venture is composed of operator Petrocorp Exploration China Ltd. 60%, Santa Fe Energy Resources of China Inc. 25%, and Nomeco China Oil Co. 15%.

Petrocorp is a unit of Fletcher Challenge Ltd., Wellington, N.Z., Santa Fe Energy Resources China is a unit of Santa Fe Energy Resources Inc., and Nomeco China is a unit of Nomeco Oil & Gas Co., in turn a subsidiary of CMS Energy Corp., Jackson, Mich.

Their contract calls for an initial 3 year term, during which the joint venture is required to conduct geophysical surveys and drill two test wells. No further details are disclosed on the combine's obligations.

Cnodc retained the option to participate in development of any oil fields discovered in the contract area for as much as a 51% interest.

The contract area of about 3.9 million acres lies on the southern edge of the East China rift system, about 450 miles west of Shanghai, in Hunan Province.

IEMC Ltd., Golden, Colo., earlier negotiated basic terms of a production sharing contract with Cnodc covering the block (OGJ, Nov. 25, 1985, p. 41). There was no later report of activity on the block.