China National Offshore Oil Company Limited (CNOOC Ltd.) announced Tuesday that Chevron China (Chevron) and BP China (BP) will explore three deepwater oil and gas blocks in the South China Sea by share acquisition from Devon Energy Corporation (Devon).

China National Offshore Oil Corporation (CNOOC), China's largest oil and gas producer and parent company of the CNOOC Ltd., has signed amendment agreements to the production sharing contracts (PSCs) with Chevron, BP and Devon for deepwater blocks 42/05, 64/18 and 53/30 in the South China Sea, and these agreements have been approved by the Chinese government.

The financial terms of the deal were not disclosed.

Prior to this, Chevron and BP signed sale and purchase agreements with Devon for the three blocks.

Chevron acquired a 59.18 percent interest in block 42/05 and a 100 percent interest in blocks 64/18 and 53/30 from Devon in the exploration phase. BP acquired the remaining interest of Devon in block 42/05.

Block 42/05, located in Baiyun Sag of Pearl River Mouth Basin in the Eastern South China Sea, covers a total area of 6,939 square kilometers.

Blocks 64/18 and 53/30 are located in Qiong Dong Nan Basin in the Western South China Sea with an area of 7,712 and 6,313 square kilometers respectively. Water depth of the three blocks ranges from 300 to 2,000 meters.

During the exploration period, Chevron will act as the operator in the three blocks. CNOOC Ltd has the right to participate in up to a 51 percent interest in the event of any commercial discovery in the blocks.

CNOOC Ltd. has announced three deepwater discoveries so far, all located in the South China Sea.

All foreign companies exploring in deep water in the South China Sea sign production sharing contracts with the CNOOC Ltd.