Rosneft and Sinopec, a subsidiary of the China National Petroleum Corporation, signed a contract to open a joint company for geological prospecting work on the Veninsky deposit as part of the Sakhalin-III project, a Rosneft press release says.
Rosneft holds a 75% stake in Sakhalin-III. In April 2003, Rosneft was licensed to conduct geological development of the Veninsky block for five years, and launched geological exploration and subsequent prospecting of it the following year. According to preliminary estimates, the Veninsky block contains 114 million metric tons of oil and 315 billion cubic meters of gas.
Under the protocol, the joint company to be founded in Russia will be the direct holder of the Veninsky license and the operator of the project.
According to the Rosneft-Sinaco document, the parties will accelerate the implementation of a new geological prospecting program that is to be approved soon. The program will also include the drilling of a prospecting well in 2006.
Sinopec Group and Rosneft will also adjust the current program for geological prospecting.
CNPC is China's largest state-owned oil and gas company and is a leading integrated oil and gas producer in the world. It provides 79% of oil supplies to China's domestic market, controls 95% of the gas market and 40% of the oil market in China, and participates in 27 foreign projects.
Rosneft is Russia's second largest oil giant after LUKoil. It plans to produce over 78 million metric tons of oil in 2005.