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China National Offshore Oil Company Limited (CNOOC Ltd) announced Wednesday that its parent China National Offshore Oil Corporation (CNOOC) has signed two production sharing contracts (PSC) with US-based Newfield Exploration Company.

The two contracts are for blocks numbered 22/15 and 16/05, both in the South China Sea.

Block 22/15 in the Beibu Gulf Basin in the western South China Sea covers 5,228 square km, with water depth of 10 to 60 meters.

Newfield will reprocess the two-dimensional seismic data, a technical survey containing geological clues for hidden oilfields, and conduct drilling operations.

Located in the Pearl River basin, block 16/05 covers 2,064 square km.

CNOOC and Newfield had signed a geophysical survey agreement on this block in 2005, under which Newfield committed to exploration drilling.

Under the contracts, all costs incurred during the exploration will be borne by Newfield. CNOOC Ltd has the right to an interest up to 51 percent in the event of any commercial discoveries.

The two companies signed a PSC in 2005 for block 17/08, also located in the Pearl River basin.

Incorporated in Hong Kong, CNOOC Ltd is a 70.64-percent owned subsidiary of CNOOC, China's largest offshore oil and gas producer.