Taiwan-based Chinese Petroleum Corp (CPC,
Both are state-run companies. They are planning to jointly explore areas around Nanri Island (南日島盆) for oil and gas deposits, a local Chinese-language daily reported yesterday.
Chinese Petroleum executives were quoted in the report as saying that a deal could be signed sometime in 2004.
The report said that an evaluation of Nanri's oil and gas reserves showed potential and the company was now awaiting approval from its board before applying for government approval.
The agreement to drill exploratory wells in the area would be based on the same format of an agreement signed between the two in May that will see them drill for oil in the Tainan Basin, about 140km from Kaohsiung.
That deal saw Chinese Petroleum and CNOOC invest around US$25 million over four years to hunt for oil through a joint venture firm named Tainan-Chaosham Petroleum Co (
The project covers 15,400km2 and include the territorial waters of both China and Taiwan.
As a net oil importer since 1993, Beijing intends to expand its oil sources by investing in exploration and production abroad.
The deal would also help Taiwan to ease its heavy dependence on oil imports.
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