China's primary offshore oil company China National Offshore Oil Corp. (CEO), also known as CNOOC, has invited bids from foreign firms on 33 oil and gas exploration blocks offshore China in an attempt to boost domestic oil supply.
These blocks are spread across a total acreage of 48,690 square miles (126,108 square kilometers). Notably, 15 of these exploration blocks were previously on offer.
Blocks 25/12, 33/02, 41/14 and 04/02 are located in the East China Sea Basin, while Blocks 24/17, 14/18, 11/34 and 19/11 are situated in the South Yellow Sea Basin.
Of the total number of petroleum exploration blocks available for bidding in the CNOOC tender, 17 are in the Pear River Mouth Basin (East). These comprise 14/21, 16/15, 16/28, 27/04, 28/06, 28/16, 29/31, 29/11, 29/24, 41/12, 42/10, 43/08, 44/07, 55/05, 15/33, 16/25 and 42/12.
Five exploration blocks – 53/32, 53/36, 64/05, 64/03 and 64/26 – that are on offer in the CNOOC tender are found in the Qiong Dongnan Basin. Blocks 22/16 and 22/11, located in the Beibu Gulf Basin and Block 50/13 in the Yinggehai Basin, are the remaining permits for foreign companies to choose.
CNOOC has asked all qualified foreign companies interested in data acquisition to visit its data room in Shangai, Guangzhou and Zhanjiang. The closing date of the data room is Dec 31. The company added that firms keen on submitting bids for exploration blocks need to do it by Apr 30, 2015.
In 2013, the company had offered 25 blocks to foreign companies. However, it did not receive any successful bids. In China, the foreign companies generally cover all exploration and development costs and cannot hold over 49% stake in a project. Due to high expenses and the absence of information on quality of the assets, few companies show interest.
CNOOC now carries a Zacks Rank #2 (Buy). Other stocks to consider in the same industry include Cameron International Corporation (CAM), Valero Energy Partners LP (VLP) and Sunoco Logistics Partners L.P (SXL). All of these stocks sport a Zacks Rank #1 (Strong Buy).
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