China National Offshore Oil Company (CNOOC) said that it signed oil and gas deals with nine major global firms. The deals followed the announcement that China's market will accept agreements with oil companies and give them new opportunities to develop fields while working as partners of the nation's biggest offshore explorer.
The signing of the deals took place after President Xi Jinping's address to party cadres which marked 40 years of reform of China's governance and expressed the nation's commitment to global trade. According to reports, the agreements will explore the 64,000 square km in the Pearl River Basin. The firms will harvest oil to a depth of up to 3, 000 meters. The Royal Dutch Shell is one of the biggest partners of CNOOC in the deals.
Netherlands-based Shell, France Total, and U.S.-based Chevron are also included in the beneficiaries of the agreements. The three companies have existing partnership contracts with CNOOC. ConocoPhillips, Equinox, Husky Energy, Kuwait Foreign Petroleum Exploration, Roc Oil, and SK innovation are also involved in the deal signing.
Tian Miao, a Beijing-based analyst at Everbright Sun Hung Kai Co, said that it is no coincidence that CNOOC made the statement a couple of hours after President Xi's speech since it is only reasonable to assume that this is one of the real actions China is taking to show the world that it is willing to open businesses to other nations.
Since the start of its business operations in the early 1980s, the CNOOC has signed at least 200 production sharing contracts even though the company can operate on its own given that it has its own resources to explore the deep waters of China for its oil. The most recent exploration of the company is the famous Lingshui 17-2 gas field in the South China Sea. The company assures that they will answer the call of President Xi to enhance energy security by increasing the company's spending to yield a bigger output. The need for the enhancement in China's energy is caused by the increase in import and the continued trade conflict with the United States.
According to a CNOOC's listed unit, the agreements will facilitate the establishment of a long-term and stable cooperation and share the development opportunities to a certain extent in the Strategic Cooperation Areas which will create conditions for the final signing of contracts.
