By OGJ editors
HOUSTON, Feb. 22 -- Devon Energy Corp. has signed a production sharing contract (PSC) with China National Offshore Oil Corp. (CNOOC) for Block 11/34 in the South Yellow Sea off eastern China.
The block covers 4,200 sq miles in 50-125 ft of water, 60 miles from Quingdao and 250 miles northeast of Shanghai.
Devon will operate the block with a 100% working interest, subject to government approvals. CNOOC has the option to back in for as much as a 51% working interest if there's a commercial discovery. Devon will conduct a seismic survey and drill exploratory wells during the exploration period.
In 2005, Devon signed a PSC with CNOOC for deepwater Block 42/05, which covers 2,700 sq miles in the Pearl River Mouth basin of the South China Sea.
Devon began producing oil off China in 2003 from Panyu field on Block 15/34 in the South China Sea. To date, Panyu has produced 55 million bbl of oil from two fixed platforms tied to a floating production, storage, and offloading vessel. Devon holds a 24.5% working interest in Panyu and operated the project during the exploration and development phases.