Chevron Corp. (NYSE:CVX) has acquired the operating interest in three Devon Energy Corp. (NYSE:DVN) exploration blocks in the South China Sea. Terms of the deal weren't disclosed.
Two of the three blocks, 53/30 and 64/18, had 100 percent interests acquired by Chevron from Devon, while with the final block, 42/05, Chevron acquired a 59.18 percent interest, and BP (NYSE:BP) the remaining 40.82 percent interest.
The South China Sea has been ignored for some time because of the lack of shallow-water oil finds. Now drillers are going deeper in their search for oil and gas, inspired by the find of Husky Energy (TSE:HSE) several years ago when they found trillions of cubic feet of gas reserves able to be recovered.
In the three blocks acquired by Chevron, the China National Offshore Oil Corp. (CNOOC), has the right to take a majority interest in any oil or gas discovery.
All companies outside of China must sign these contracts in order to do business there.
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