Rosneft and the China National Petroleum Corporation (CNPC) have today concluded a long-term cooperation agreement. The companies’ presidents, Sergei Bogdanchikov and Chen Gen, signed the document.

The parties expressed their intention to continue full, long-term and mutually beneficial cooperation for the sharing of experience and joint development.

Under the agreement, Rosneft and CNPC resolved to identify new ways of expanding oil exports to China on mutually profitable commercial terms. Rosneft will therefore consider the possibility of using the Atasu-Alashankou and Taishet-Skovorodino pipelines.

In addition, pursuant to the agreement, Rosneft and CNPC intend to start negotiations on possible cooperation in exploring and developing Sakhalin shelf oil and gas deposits. The companies will examine different ways of cooperation: strategic investments, establishment of joint ventures, shared participation, assets exchange and other.

Under the agreement, the parties expressed their interest in increasing the volumes of Sakhalin natural gas supplied to China. CNPC is to apply its best efforts toward reaching agreement on deliveries of gas from the Sakhalin-1 project (in which Rosneft is a participant) on mutually profitable commercial terms. It also intends to sign documents on the project’s implementation with project participants in the fall of 2005.

According to the document signed, Rosneft and CNPC are to identify possibilities for cooperation in the following spheres:

• technological exchange and cooperation in projects aimed at intensifying the development of old deposits;
• joint exploration and development of deposits in third countries;
• cooperation in the fields of science and technology, exchange of experts;
• cooperation in the sphere of engineering and technological services, including seismology, drilling, down-hole measurement, and the construction of aboveground oil-and-gas objects.

The companies will establish a Joint Coordinating Committee comprising the companies’ top officials to coordinate activities.

Rosneft and CNPC also agreed on permanent exchanges of information.