The two companies will develop and operate Venezuela's Zumano fields in the eastern part of the country, state-run Petroleos de Venezuela said on its Web site. Zumano has proven reserves of about 400 million barrels of light oil and four trillion cubic feet of natural gas.

A Petroleos de Venezuela spokesman said the venture would be the first exploration and production project under the country's new hydrocarbons law, which stipulates majority control of such ventures by the Venezuelan company.

Petroleos de Venezuela in January offered CNPC the Zumano fields, which are now producing about 25,000 barrels of oil a day.

``We want China to participate as an investor, as well as a partner'' in oil-development projects, Rafael Ramirez, Petroleos de Venezuela's president and Venezuela's oil minister, said in Beijing as he concluded a visit to China.

Venezuela plans to spend US$56 billion (HK$436.8 billion) through 2012 to double oil production to 5.1 million barrels a day from about 2.6 million barrels currently.

The two companies are also studying a possible refinery project in China, Petroleos de Venezuela said. China may also finance infrastructure projects in the South American country, the company said.

Venezuelan President Hugo Chavez is seeking increased energy co-operation with China, the world's second-largest oil importer, to reduce the South American country's dependence on the US market, the world's largest.

China's oil consumption has more than doubled over the past decade to about 5.55 million barrels a day, of which more than half is imported, according to the US Energy Information Administration.

Venezuela said Monday that it expects its oil exports to China to soar to 300,000 barrels a day by 2012 from the current level of 68,800 barrels.

The South American country, which is the world's fifth-largest oil exporter, hopes to supply 15 percent to 20 percent of China's oil import needs, Ramirez said Thursday, without providing a timeframe for that goal. BLOOMBERG