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. Last Updated: 07/27/2016

LUKoil, CNPC Sign Cooperation Deal

LUKoil and China's CNPC have a struck a deal to cooperate on oil and gas production abroad and supplying hydrocarbons to China.

LUKoil president Vagit Alekperov and CNPC chairman Jiang Jiemin signed an agreement in Beijing "to expand cooperation in current projects and work on projects for production, exploration and refining of oil, gas and oil products" abroad, LUKoil said Saturday in an e-mailed statement. CNPC is China's biggest oil company.

The partners will also consider "opportunities to cooperate on supplying oil and gas to China and refining hydrocarbons" in the country, the statement said.

China is seeking energy supplies as its economy expands at an annual rate of 11.9 percent, the fastest pace in more than a dozen years. The leaders of China and Kazakhstan last month agreed to finance and build a network of pipelines to supply China with oil and gas from the Caspian Sea region.

The joint projects of LUKoil and CNPC in Kazakhstan include an equally co-owned Kumkol oil field and a Northern Buzachi field, in which CNPC holds a 50 percent stake and LUKoil has a 25 percent holding, the statement said. The two companies also each hold a 20 percent stake in an offshore international venture to explore for oil and natural gas in Uzbekistan's side of the Aral Sea.

Turgai Petroleum, a Kazakh producer co-owned by LUKoil and CNPC, plans to start supplying crude oil to China next year, Boris Zilbermints, a LUKoil director for Kazakh operations, said in June. LUKoil plans to buy out CNPC's 50 percent of Turgai after winning the right to buy the holding through arbitration in Stockholm last year.