China Daily citing Mr Yang Hua CEO of China biggest offshore energy explorer as saying that CNOOC Ltd and BP Plc are in talks on a production-sharing agreement in the South China Sea.

He said that "We are talking about it."

Mr Yang Hua said after a media briefing in Hong Kong recently without giving details or saying if the parent company, or its listed unit, were involved in the negotiations.

Sky News reported on November 6 citing unidentified people that BP is close to signing a major exploration agreement with China National Offshore Oil Corp, CNOOC parent. BP and the State-owned company would jointly explore in the South China Sea.

CNOOC based in Beijing said last month third quarter revenue rose 64% as the company stepped up acquisitions and output to meet fuel demand in the world fastest growing major economy. The company has spent more than USD 4 billion so far this year on oil and gas assets in Argentina and North America.

Mr Yang said after the briefing that the USD 1.08 billion acquisition of a stake in the Eagle Ford shale gas project in the United States is in line with the strategy of adding value to CNOOC regardless of whether the assets are offshore or on land.

The shares have risen 41% this year in Hong Kong, compared with a 5.3% gain for the Hang Seng index. CNOOC advanced 0.4% to HKD 17.16 recently. Twenty one out of 33 analysts surveyed by Bloomberg rate the stock a buy while six rate it a hold.

(Sourced from China Daily)