CNOOC's 2017 offshore licensing round offers fiscal flexibility

CNOOC has offered 22 exploration blocks to foreign companies in its 2017 China offshore licensing round. More flexibility is allowed for deepwater, deep-reservoir and HP/HT blocks this year on extending production periods, zero relinquishment during the first and second exploration phases, timing of signature bonus payment, and profit sharing between CNOOC and contractors in the development phase. This reflects CNOOC's strong intention to encourage offshore exploration in China on the back of a 3.8% decline in its domestic production in 2016.