OREANDA-NEWS. Husky Oil Operations (China) Limited (Husky), an affiliate of Husky Energy (TSX: HSE), has signed a Production Sharing Contract (PSC) for an exploration block offshore China.

The 15/33 block is located in the Pearl River Mouth Basin in the South China Sea, about 140 kilometres southeast of Hong Kong, in water depths of approximately 80-100 metres. Husky expects to drill two wells on the 155 square-kilometre block in the 2017 timeframe.

Husky is the operator of the block during the exploration phase, with a working interest of 100 percent. In the event of a commercial discovery, its partner CNOOC may assume a working interest of up to 51 percent during the development and production phase. Exploration cost recovery from production would be allocated to Husky.

The Company continues to advance a rich portfolio of strong projects and opportunities in the Asia Pacific Region, including the Liwan Gas Project in the South China Sea and four natural gas developments in the Madura Strait offshore Indonesia.

Husky holds a 49 percent working interest in the PSC for the Liwan Gas Project and operates the deepwater infrastructure. CNOOC holds a 51 percent interest and operates the shallow water facilities and onshore gas terminal. Husky holds a 40 percent interest in a joint venture company which holds the PSC for the Madura Strait block offshore Indonesia, which will be developed in partnership with CNOOC (as the operator) and an affiliate of Samudra Energy Ltd., Indonesia.

Husky also has a 40 percent working interest in the Wenchang oil field, located in the Pearl River Mouth Basin about 400 kilometres southwest of Hong Kong.