Chevron, BP to buy Devon Energy's stake in South China exploration blocks

US oil major Chevron Corporation has entered into a deal to buy Devon Energy's operating interests in three deepwater exploration blocks in the South China Sea, while BP will acquire an interest in one block, said Cnooc, China's largest offshore oil producer.
Chevron will buy a 59.18-per cent interest in block 42 / 05 and a 100-per cent interest in blocks 64/18 and 53/30 from US-based Devon Energy Corporation in the exploration phase.

BP will acquire the remaining interest in block 42 / 05.

Block 42 / 05, located in Baiyun Sag of Pearl River Mouth Basin in the Eastern South China Sea, covers a total area of 6,939kms. Blocks 64 / 18 and 53 / 30 are located in Qiong Dong Nan Basin in the Western South China Sea with acreage of 7,712 and 6,313kms respectively.

During the exploration period, Chevron will act as the operator in the three blocks. Cnooc has the right to participate in up to a 51-per cent interest in the event of any commercial discovery in the blocks.

''We welcome Chevron and BP to become our new partners in these blocks and look forward to the joint exploration of the great deepwater potential in the South China Sea,'' said Zhu Weilin, executive vice president of Cnooc.

Oklahoma City-based Devon, one of the world's leading independent oil and gas exploration and production companies, had revealed plans in November 2009 to divest all of its international assets, including those in the Gulf of Mexico, in a move to focus on its core onshore portfolio in North America and repay its debt. (See: Devon Energy plans to raise up to $7.5 billion through asset sales)

In May 2010, it sold its 24.5 per cent stake in Panyu field in South China Sea oil block to Cnooc for $515 million. (See: CNOOC to acquire Devon Energy's stake in Panyu field for $515 million)