Canada's Husky Energy signed a production sharing contract (PSC) for a new exploration block in the Pearl River Mouth Basin, offshore China.
Block 16/25 is about 150km southeast of Hong Kong.
Husky expects to drill two exploration wells on the shallow water block during 2018, in conjunction with two planned exploration wells at the nearby exploration Block 15/33.
Husky is the operator of both blocks during the exploration phase, with a working interest of 100%.
In the event of a commercial discovery, its partner CNOOC may assume an up to 51% participating interest during the development and production phase.