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BIZCHINA / Center
CNOOC to exploit oil with US firm despite new tax policy
(Xinhua)
Updated: 2007-08-01 11:24
China National Offshore Oil Corp (CNOOC), the country's largest offshore
oil producer, is in talks with a US firm for a possible product-sharing
contract on an oilfield in the South China Sea.
The contract, likely to be inked in a few weeks, will make Texas-based
Newfield Exploration Co the first to be affected by a new policy, which
will levy a five-percent tax from August 1 on offshore oil exports by
foreign firms that co-develop Chinese oilfields with domestic firms,
The policy is seen as another measure the Chinese government has taken to
curb exports of important resources, after a five-percent tax was
collected on exports of coal, coke and crude oil from November last year.
But it appears to have failed to dull the enthusiasm of foreign firms
intending to exploit oil in China's offshore waters.
The policy change would have "a very limited impact" on CNOOC's
cooperation with foreign firms in oil exploitation, Tuesday's Shanghai
Securities News quoted Xiao Zongwei, general manager of CNOOC's investor
relations department, as saying.
He declined to comment on the cooperation between his company and
Newfield on the new offshore oilfield in the South China Sea, the paper
said.
The South China Sea has long been considered to have rich oil and gas
resources, with a number of foreign firms - including Canada's Husky
Energy Inc, Australia's Roc Oil Co and Britain's BG Group Plc -
prospecting for and exploiting oil there.
For the last 25 years, the Chinese government had exempted such firms
from taxes on offshore oil exports to encourage them to cooperate with
domestic firms because offshore oil exploitation involves high risks and
requires advanced technology.
The new oilfield was in a 5,424-square-kilometer block, with a water
depth between of 10 meters and 60 meters, the paper said.
(For more biz stories, please visit Industry Updates)
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