BEIJING, Aug 1 (Reuters) - Oil major Royal Dutch Shell and China's CNOOC Ltd announced a newproduction sharing contract on Thursday to explore for oil andgas in an offshore block in the South China Sea.
Block 35/10, in the Yinggehai Basin west of Hainan Island insouthern China, covers a total area of 3,427 square kilometreswith water depth of 80-110 meters, the companies said.
Shell would conduct 3D seismic data surveys and may drillexploration wells during the exploration period. Shell will bearall the cost during the exploration phase, while CNOOC has theright to back in with a 51% interest in development stage.
A year ago, Shell entered a deal with CNOOC to exploreanother two blocks in the same basin.