Participating in the signing ceremony were (left to right) Heidi Wong of ChevronTexaco Public & Government Affairs; Sam Snyder, managing director of ChevronTexaco's China Strategic Business Unit; Cao Yun Shi, general counsel of China National Offshore Oil Corp. (CNOOC) and Lu Zheng, a legal consultant with CNOOC.
Because the BZ25-1/25-1S oil field straddles the boundary between two contract blocks, the agreement to unitize means that the project will now be developed under the "five-one principle" agreed upon by senior management of both companies, namely, one project, one operator, one management structure, one set of facilities, and one equity determination. Under the terms of the agreement, ChevronTexaco holds 16.2 percent participation interest in the entire unitized project. CNOOC owns the remaining 83.8 percent and will be the operator.
The BZ25-1/25-1S oil field is located about 150 kilometers (93 miles) southeast of Tanggu in Bohai Bay. The agreement covers a total area of 218 square kilometers (84 square miles).
"This first-ever unitization agreement for China marks another milepost in ChevronTexaco's long-standing, successful business relationship with CNOOC," said Sam Snyder, managing director of ChevronTexaco's China Business Unit. "Guided by the principle of mutually beneficial partnership, we have jointly created a highly efficient model for the commercial development of this field," he said.
The petroleum contract for Block 11/19 in Bohai Bay was signed in April 1992. The BZ25-1 oil field was discovered by ChevronTexaco via exploration of the block. Following an appraisal program, the field was redesignated BZ25-1S and determined to be an oil field straddling the boundary between Block 11/19 and the self-financed area of CNOOC.
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