BEIJING, Feb. 20 -- CNOOC Ltd, China's biggest offshore oil and gas producer, has signed a production sharing contract to explore for crude oil and natural gas and develop an area offshore of Equatorial Guinea.

    The contract area covers 2,287 square kilometers with a water depth between 30 meters and 1,500 meters, according to a statement issued by the Beijing-based company over the weekend.

    The contract was signed between CNOOC Africa Ltd, the National Oil Company of Equatorial Guinea and the Ministry of Mines, Industry and Energy, according to the statement.

    The exploration period was set at five years, and CNOOC will act as the project's technical operator, the statement said

    Under the terms of the contract, CNOOC will conduct seismic data interpretation and drill exploratory wells.

    Zhu Mingcai, a CNOOC vice president, said the signing of the agreement represents another sign of progress in CNOOC's overseas expansion effort.

    The parties to the agreement said they foresee significant breakthroughs in the area, which has favorable geological conditions, Zhu said.

    China is encouraging its companies to secure oil and gas supplies at home and abroad to meet rising domestic demand.

    CNOOC said in January that it aims to boost oil and natural gas output by about 9 percent this year, aided by contributions from new wells.

    Output may rise to the equivalent of 170 million barrels of crude oil this year, from 157 million barrels in 2005, CNOOC said.

    Production at fields off the coast of China may amount to 149 million barrels this year.

   (Source: ShanghaiDaily.com/Agencies)