BEIJING, Aug 27: A Chinese firm has won a joint contract from the state oil companies of China, the Philippines and Vietnam to search for oil and gas in a disputed area of the South China Sea, state media said Saturday.

China Oilfield Services Ltd. (COS), a subsidiary of China National Offshore Oil Corporation (CNOOC), was given the go-ahead to explore around the disputed Spratly Islands chain after agreement by the three nationalized conglomerates, Xinhua news agency said.

CNOOC, Philippine National Oil Co. (PNOC), and Vietnam Oil and Gas Corp., also known as PetroVietnam, agreed in March to conduct seismic work programmes — setting off explosions to monitor the shock waves for pockets of oil and gas — over three years over an area of about 143,000 square kilometres (55,000 square miles).

A CNOOC official hailed the contract, saying it was an important step by the three countries to jointly implement the Declaration on the Conduct of Parties in the South China Sea, Xinhua said.

The declaration, signed between China and members of the Association of Southeast Asian Nations in 2002, is a major political document on peacefully resolving disputes in the resource-rich South China Sea, it said.

Besides the three countries, Brunei, Malaysia and Taiwan also have claims to the Spratlys Islands. All claimants, except Brunei, station troops on parts of the archipelago.

Analysts say the joint exploration of the region surrounding the Spratlys is part of China’s quest for energy to run its booming economy.

The exploration award was announced only weeks after CNOOC’s 18.5 billion dollar bid to buy the US-based Unocal was turned down by shareholders of the US company.

It also comes after the China National Petroleum Corporation (CNPC) announced this week that it would buy Calgary-based PetroKazakhstan Inc. for 4.18 billion dollars.

Under the bid awarded Friday, COS would handle a two-dimensional seismic exploration project, Xinhua said. No information was given on how much the deal was worth to the company.

The three national oil companies have also agreed to a more detailed three-dimensional project, but it was not immediately clear if a contract had been awarded.

Listed in Hong Kong in 2002, the COS is China’s largest offshore oil field services company, with a 65 per cent stake held by the CNOOC.

Meanwhile, the Beijing News said CNOOC has entered a deal with a top Australian engineering firm to build a 17 billion yuan (2 billion dollar) oil refinery in the southern province of Guangdong.

CNOOC would build the refinery in Huizhou city in a move that should help alleviate oil shortages in Guangdong, China’s leading industrial powerhouse, it said.

It would be CNOOC’s first foray into the refining business. The company has largely been engaged in offshore and onshore oil exploration and extraction.

A deal to build the refinery was signed late Thursday with WorleyParsons, a leading Australian engineering company engaged in the energy sector, the report said.—AFP