Rosneft, CNPC Create Joint Venture
State oil company OAO Rosneft announced Tuesday that it had set up a joint venture with China National Petroleum Corp. to explore for oil in Russia, a sign of the two nations' closer cooperation in the energy sector.
Rosneft president Sergei Bogdanchikov and his counterpart at CNPC, Chen Geng, signed the deal on Monday, the company said in a statement.
Rosneft will hold 51 percent of the new entity, called Vostok Energy, while CNPC will have 49 percent. The company said the venture was intended to eventually become a production company that would market its own hydrocarbons in the future.
The deal marks the latest advance by energy hungry China to tap into Russia's vast energy resources, and comes after CNPC bought a US$500 million slice of Rosneft's US$10.4 billion initial public offering in the summer. Analysts had predicted that this would open access to Russia's oil reserves for the company.
Russia is the world's second largest oil exporter after Saudi Arabia, while China has accounted for about 40 percent of global demand growth over the past several years.
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