CNOOC said Tuesday it signed a production sharing contract with Smart Oil Investment Ltd. for work in a 100-square-mile area in the shallow waters of Block 05/31 in Bohai.
"According to the terms of the PSC, Smart Oil will conduct 3D seismic data survey and drill exploration wells in the block during the exploration period, in which all expenditures incurred will be borne by Smart Oil," the Chinese company said in a statement.
The terms of the deal weren't disclosed.
CNOOC declared two oil discoveries in the Bohai Bay off the Chinese coast in July. The area is estimated to hold as much as 146 billion barrels of oil.
ConocoPhillips in 2011 observed "several small seeps" from a production platform in Bohai Bay associated with a release. Conoco removed about 13,000 cubic feet of oil-based drilling mud after the incident.
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