On 18 May 2020, CNOOC offered 15 blocks with a total area of 9,453 sq km under the CNOOC 2020 Offshore China Open Block Tender. The bid round will close on 31 October 2020. The bid round will be held under the Regulations of the People's Republic of China on the Exploitation of Offshore Petroleum Resources in Cooperation with Foreign Enterprises. In the Announcement of Notification for Bidding Blocks Offshore China of 2020 it is stated CNOOC is willing to be âflexibleâ in negotiating certain terms stating: âIn 2020, CNOOC will innovate cooperation modes with foreign enterprises and expand the scope of partners while continuing to uphold the vision of win-win cooperation. In the meantime, for deep water areas and deep formation, CNOOC will adopt flexible and preferential business arrangements in terms of exploration period, relinquishment, signature fee, participating interest and X factor [profit petroleum share] in the hope of achieving the goals of expanding cooperation with foreign enterprises and enhancing foreign investments in China offshore oil and gas exploration and developmentâ.Although the base terms for the bid round have not been stated, it is understood the generic terms that apply under a production sharing contract are:->State participation of 51%.->Signature bonus.->Oil royalty based on annual production tranches at rates between 0% and 12.5%.->Gas royalty based on annual production tranches at rates between 0% and 3%.->Environmental Protection Tax based on rates of emissions of polluting substances.->Cost recovery ceiling of 50% to 62.5% (dependent on royalty rate).->Contractor profit share based on average daily production with effective rates in the range 49% to 29% (after state participation).->Income tax rate of 25%.->Special Oil Gain Levy applies to all production whenever the weighted average price of crude oil sold in any month exceeds US$ 40 per barrel for months before 1 November 2011, US$ 55 per barrel for months before 1 January 2015 and US$ 65 per barrel for months after 1 January 2015 (in the range 20% to 40%).->VAT at a rate of 5% payable on crude oil and gas production. The general rate on purchases is 16%.->Other minor taxes including withholding taxes on dividends, royalty payments, etc.<P />
n 18 May 2020, CNOOC offered 15 blocks with a total area of 9,453 sq km under the CNOOC 2020 Offshore China Open Block Tender. The bid round will close on 31 October 2020.