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Show Independents grab China Sea awards Wendell Phillips Oil Co. signs exploration agreement with South Korea covering 15 million acres. Oceanic and Clinton get 18.6-million acres off Taiwan. Japan disputing both Taiwan and South Korea awards. New acreage awards off S. Korea, Taiwan T H R E E U.S. independents have been awarded exploration rights in the East China Sea. Wendell Phillips Oil Co. (Korea) Ltd., wholly owned subsidiary of Wendell Phillips Oil Co. of Honolulu, has signed an exploration agreement with the Government of South Korea covering 15 million acres. The Taiwan Government has awarded a tract to Oceanic Exploration Co. of Denver and one to Clinton International Oil, an affiliate of Clinton Oil Co. of Wichita. Total area covered by the two tracts is 18.6 million acres. Governmental approval was made under terms of technical cooperation agreements with the state-owned Chinese Petroleum Corp. (CPC). Gulf and Amoco previously were awarded tracts under similar agreements calling for the U.S companies to foot the exploration bill and give CPC an undisclosed share of any commercial production. Phillips tract. The irregular-shaped Phillips tract (Block VII) lies between the Korean island of Cheju and the Goto Retto islands of Japan. It is in a sea area subject to sovereignty negotiations between the Korean and Japanese Governments. The 600-ft water-depth line roughly bisects the block. Terms of the Korea-Phillips pact call for a 30-year duration, with two extension periods of 5 years each. Phillips must invest $7 million over the first 7 years, and a signature bonus of $500,000. An optional 2-year period to follow would require another $3 million, bringing the company's total outlay over 9 years to $10^2 million. Production payments of $1 million are due 30 days after the first commercial delivery of oil, Phillips says, and when production hits 100,000 b/d, another $5 million will be due. Royalty payments are to be 12*4% in c a s n or in kind, and tax rate 5 0 % of net profit. The agreement provides for participation in the operation up to 20%. Oceanic, Clinton awards. Both these tracts, at their westernmost points, are within 100 miles of the Red Chinese coastline. And a portion of Clinton's tract overlaps an area claimed by South Korea. Clinton's Zone IV c o v e r s seven blocks containing approximately 8.6 million acres. Oceanic holds Zone III, containing eight blocks and about 10 million acres. Tangle. Japan is disputing awards of both South Korea and Taiwan (OGJ, Aug. 24, p. 35). South Korean and Japanese offshore awards overlap, and both South Korean and Japanese awards overlap CPC acreage. And in the area of the Senkaku islands in Zone II and southwest of Okinawa, capital island of the Ryukyu archipelago, Formosa has granted acreage claimed by Japan. Japan has offered to negotiate her claims with both countries. M e a n w h i l e , Nippon & Chevron- Texaco are to begin exploration operations southwest of Japan this month. THE OIL AND GAS JOURNAL -OCTOBER 12, 1970 61 |