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China’s Smart Oil Investment Ltd won a a production sharing contract from state-owned China National Offshore Oil Corp. to jointly work on Block 05/31 in Bohai Bay.

Located in the junction of Qikou Sag and Nanpu sag of the West of Bohai Bay basin, Block 05/31 covers an area of 270 square kilometers in the shallow waters between 5 – 15 meters depth.

According to the contract terms, privately owned independent, Smart Oil, will finance exploration activities covering 3-D seismic data acquisition and drilling of wildcat wells.

CNOOC is entitled up to 51 percent working interest in any commercial discovery of oil and gas reserves in the block.

Smart Oil is a subsidiary of Beijing-based SINO Geophysical Co., Ltd — a private company in China’s state-dominated oil sector.

State-owned CNOOC is the largest offshore oil and gas producer in China.

This is the first partnership for Smart Oil and CNOC.

Block 05/31 in Bohai Bay was opened to tenders in August 2012.

Bohai Bay, 200km east of Beijing, is China’s biggest offshore oil and gas production base. It’s owned CNOOC.

Commercial development there began in 1999.

Other partners include ChevronTexaco, Shell Exploration China Limited, Newfield Exploration, Petronas Carigali and Anadarko.