Husky signed two production sharing contracts (PSCs) with CNOOC) for Block 22/11 and 23/07 in the Beibu Gulf Basin, South China Sea, on 18 May 2018.  The Block 22/11 covers a total area of 1,663 sq km with a water depth of 40-80 m and the Block 23/07 covers a total area of 1,210 sq km with a water depth of 20-40 m.  According to the terms of the PSCs, Husky shall act as the operator during the exploration period and conduct exploration activities in the two blocks mentioned above, in which all expenditures incurred will be borne by Husky. Once entering the development phase, CNOOC has the right to participate in up to 51% of the participating interest in any commercial discoveries of the blocks.   Background Information  Both block 22/11 and 23/07 were offered in 2017 by CNOOC in the Beibu Gulf Basin.   Block 22/11 is located in the west of Weizhou Sag. Six wells have been drilled in the block without discovery. Majority fields in the basin have been found in the north of the sag and one new discovery, Wei 4, was made in the west to the block.Â    Block 23/07 is located in the west of Wushi Sag. The block is less explored with only one well drilled.   Exploration started in the Wushi Sag in the 1980s. WS 16-1 was made in 1981 but it has not been put on development due to uncommercial size. After the discovery, several wells have been drilled in this area without discovery and exploration activity has been slow down.   Since 2010, CNOOC put more effort on exploration drilling in the Wushi Sag. In 2011, WS 17-2 discovery was made in the Liushagang Formation and the discovery is under appraising.  In 2014 WS 16-9 discovery was made in 2014 and currently the discovery is under appraisal drilling.  In 2015 CNOOC made two oil discoveries in WS 16-1W-1 and WS 17-5-1, in the Wushi Sag.Â    In 2016 CNOOC has drilled WS 23-1-1, WS 23-6-1, WS 17-6-1 and WS 16-6-1 in this area but without result reported yet.  In 2017 CNOOC made oil discovery in WS 22-8-1 and WS 23-5S-1.
Husky signed PSC with CNOOC for blocks 22/11(1663kmÂ²) and 23/07 (1210kmÂ²) in the area of the South China Sea. Husky will operate the PSCs during the exploration phase, with its Chinese partner holding the right to take up a 51% stake later.