(MENAFN- Kuwait News Agency (KUNA)) The recent agreement between China National Offshore Oil Corp. (CNOOC), the country's top offshore oil producer, and oil giant Royal Dutch Shell Plc to explore for oil and gas in the South China Sea and off the coast of Gabon in West Africa marks the latest step taken by a Chinese firm to diversify its energy supply, state media said Friday. CNOOC, which produces more offshore oil than any other Chinese company, agreed on Wednesday to explore two offshore oil blocks off South China's Hainan island, the China Daily said.
Shell has agreed to shoulder the project's exploration costs, while CNOOC will be able to claim an equity interest of up to 51 percent of any commercial oil and gas discovered in the blocks. The decision is highly significant for China's strategic energy reserves while the country remains highly dependent on oil imports, the newspaper quoted a Chinese oil analyst as saying. China is the world's second-biggest oil consumer after the US and its crude oil imports mainly source from the Middle East.
In June, CNOOC issued a request seeking partners for the exploration of nine offshore blocks in the South China Sea. The nine blocks occupy more than 160,000 square kilometers and are between 300 and 4,000 meters deep, but the two blocks that Shell will help explore are not part of those projects, the report said.
China's technology that can be used in exploring for deepwater oil still lags behind what's found internationally and the country needs foreign companies to take part in its South China Sea exploration, the report said.
Shell also said on Wednesday that it had signed an agreement with China National Petroleum Corp., the nation's biggest oil company, to develop a new phase of the Changbei gas field in north China.
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