PetroChina Ltd and the state-run Petroleos de Venezuela SA, or PDVSA, will also work together on a joint venture transporting oil, as well as two joint refineries, China's official Xinhua News Agency said, citing Jiang Jiemin, PetroChina's chairman.

PetroChina will hold 40 per cent of the shares in the exploration venture and a 50 per cent stake in the oil transport project, Jiang said.

The company, Asia's biggest oil and gas producer, will have a 60 per cent share in the refineries, he told an annual shareholders' meeting on Tuesday.

No other details were given.

China's state-run industries have been eager to use Venezuela as a jumping-off point for their entry into South America, which is rich in mineral resources that can help Beijing's fast-growing domestic economy.

Venezuela, on the other hand, regards China as a key link in its strategy of diversifying oil sales away from the United States (US), which still buys about half of Venezuela's oil despite years of political tensions.

Previously announced plans for cooperation with China have called for building a refinery in Venezuela and launching a joint oil-development project in the crude-rich Orinoco River belt. China also plans to build oil tankers for Venezuela.

Boosting exports

Energy-hungry China is the world's second-biggest oil consumer and importer after the US.

In a visit to Beijing in April, Venezuelan President Hugo Chavez reviewed with Chinese leaders a goal of boosting exports of Venezuelan oil to China from 380,000 barrels last year to one million barrels by 2013.

China and Venezuela have invested in a US$12 billion fund to finance joint development projects in areas including oil production, infrastructure and agriculture.

- AP