China's largest offshore oil producer has entered into a production sharing contract and a geophysical agreement with the US Texas American Resources Company (TARC) for oil and gas exploration in south China.

The exploration will take place at two sea blocks, named Block 03/27 and Block 28/20, at the mouth of the Pearl River in south China's Guangdong Province.

The Block 03/27 covers a total area of with water depth ranging from 50 to 100 meters. Under the terms of the contract, TARC is committed to drill wildcats during the exploration period. It will fund 100 percent exploration expenditure, while China National Offshore Oil Corporation (CNOOC) backs-in with up to a 51 percent working interest at no cost in any commercial discoveries in the block.

The Block 28/20 is an area of 7,625 square kilometers. According to the geophysical agreement, TARC will acquire 3 dimensional seismic data within the block. And it has the option to sign a production sharing contract with CNOOC for the block at the expiration of the agreement.

This marks the first step in cooperation between TARC and the Company, said Zhu Weilin, vice president of the CNOOC Ltd.

TARC, formed in 1990, is an Austin-based independent private oil company in the United States. Its oil and gas exploration and production is mainly located at the Rocky mountain area and Texas.

Source: Xinhua