State-owned China National Petroleum Corp said Wednesday it has signed a cooperation agreement with US-based Hess for a block in China's western Xinjiang province.
CNPC said the contract for the Malang block in the Santanghu Basin was signed Tuesday in Beijing between Liao Yongyuan, its general manager, and Greg Hill, Hess' president of global exploration and production.
The Malang acreage is a shale oil block in the frontier Santanghu Basin in northern Xinjiang.
This follows a joint study agreement with CNPC subsidiary PetroChina for the block signed last year. Hess said in its 2012 annual report that the acreage covers approximately 200,000 gross acres in the basin.
Analysts had said the Malang contract would likely offer different commercial terms from a conventional production sharing agreement given that it contains unconventional resources.
In 2010, Hess signed joint assessment agreements with PetroChina for the Daqing block -- China's largest oil producing block -- and with Sinopec at its flagship Shengli block to evaluate tight oil formations. Hess had said it was hoping to use its expertise in the Bakken Shale play in the US to unlock new potential in China's basins.
