Chevron has signed production-sharing contracts with CNOOC for two exploration blocks in the South China Sea, expanding its presence in the prospective oil and gas region even after drilling three dry holes there last year.

Through its deal with the Chinese offshore oil firm, Chevron will own and operate the shallow-water blocks that cover about 2,233 sq miles in the Pearl River Mouth Basin, the second-largest US oil company said. Exploration of the blocks was part of Chevron’s plan to expand in the Asia Pacific region, where it is developing liquefied natural gas projects as well as deepwater, shale and sour gas resources, Chevron vice-chairman George Kirkland said.