CHINA National Offshore Oil Corporation has signed a production sharing contract with Italy’s Eni, covering exploration of a block offshore Hainan Island, in the South China Sea.

One of the blocks offered for foreign cooperation by CNOOC in 2012, Block 50/34 covers 200,000 hectares of conventional waters in the Qiongdongnan basin.

Eni will conduct 3D seismic survey and drill exploration well in Block 50/34 during the 6.5 year exploration period, divided into three phases, with the company to bear all expenditure incurred during the exploration period.

CNOOC has the right to participate in up to a 51 per cent working interest in any commercial discoveries in the block.

Eni said the new production sharing contract confirmed its continued interest in China and the South China Sea, where the company has worked since the mid-1980s.