Chevron Corp.'s subsidiary in China has entered into production-sharing agreements for oil and gas exploration in the South China Sea.

The contracts with China National Offshore Oil Corp. (CNOOC) are for two shallow-water blocks in the Pearl River Mouth Basin, where companies like Newfield Exploration Co. are also exploring.

The exploration blocks cover a total area of about 2,200 square miles.

In rolling out a similar deal in 2010, Chevron said it has a presence in China dating back nearly a century. It has been partnering with CNOOC in the Bohai Bay and the South China Sea and in onshore fields in Sichuan province. The South China Sea is disputed territory for countries bordering it, with China pressing hard to dominate areas that could produce a lot of oil and gas.

U.S.-China production and exploration partnerships are still hard to come by. Chevron joins other multinational energy companies, including Royal Dutch Shell PLC and Exxon Mobil Corp., in pursuing partnerships with China's three major state-owned oil and gas companies.

"Exploration of these blocks builds on our strategy to grow our business across the Asia-Pacific region, where we are developing LNG, deepwater, shale and sour gas resources," said Chevron Vice Chairman George Kirkland.

Chevron is increasingly active in drilling and liquefied natural gas export projects that can sell into the Asia market, dominated by Japan and South Korea but increasingly a sought-after energy source by China.

In December, Chevron officials said its 2013 capital budget would be $36 billion, an increase of 12 percent from its 2012 spending budget.

Chevron is spending a massive amount to develop the Gorgon LNG project in Australia. The cost for that project has been rising steadily and now breaching the $50 billion mark, up from a previous estimate of $37 billion. About one-third of that cost increase is the result of the strong Australian dollar, according to Barclays' equity research.

The Gorgon project is expected to be complete in late 2014. The project is now 55 percent complete, according to Chevron.

Roughly $20 billion of Chevron's 2013 spending budget will go toward expanding projects in Australia, Nigeria, the U.S. Gulf of Mexico, Kazakhstan, Angola and the Republic of Congo.