BP Goes Fossil Fuel Hunting Off China Coast

BP has a new hydrocarbon hunting ground, off coastal China.

The British "beyond petroleum" energy giant got an OK from China's Ministry of Commerce this week to explore for natural gas and oil in the South China Sea. It will be BP's second deep water adventure in China.

Last week, the company received the green light to partner in a China Sea gas field block 43/11, Chen Liming, president of BP China, said on Tuesday. The China National Offshore Oil Corp, CNOOC (CEO), operates the field.

BP will hold a roughly 40% stake in the block during the exploration period and a 20% stake when the field becomes commercial.

The ministry's approval was the final official step needed before the project can begin. Chen did not say when the exploration will start.

BP's participation in the block 43/11 will reduce the size of the share currently held by Anadarko Petroleum Corp (APC), which held a 50% stake with CNOOC.

BP entered the deep sea China hydrocarbon business in late 2010 with a 41% share in another field in the South China Sea.  China's government is trying to follow the lead of other emerging markets, namely Brazil, to explore and develop deep water reserves of oil and gas. China is a major oil and gas importer and it is within the country's strategic interest to develop its own oil and gas resources.

BP has invested about $5 billion into the country over the last 30 years.