PetroChina, BP continue coal-bed methane project in Xinjiang

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PetroChina and BP have agreed to continue exploring for coal-bed methane in Xinjiang, the Chinese firm said Wednesday, days after saying it would welcome closer ties with the troubled British group.

The comments were published after PetroChina told the Financial Times Monday that it would "welcome cooperation opportunities" with BP, which is battling to contain a massive oil leak in the Gulf of Mexico.

PetroChina, the listed arm of the country's top oil producer China National Petroleum Corp, and BP have completed a preliminary assessment of the Sha Erhu block in the Tuha basin in the remote northwestern region of China, the company said.

The two companies have reached a "new cooperation" agreement on the project, including the budget, drilling contracts and staff needed for the next stage, PetroChina said in an internal newsletter.

PetroChina is open to working with BP on coal-bed methane, oil and natural gas exploration, Mao Zefeng, a Hong Kong-based spokesman for PetroChina, told AFP Wednesday.

Mao declined to comment on whether the Chinese oil giant was interested in acquiring BP's overseas assets, only saying existing deals with BP were "going smoothly".

The two firms currently have a joint venture to operate petrol stations in the southern province of Guangdong.

Chinese energy companies have this year invested billions of dollars on overseas acquisitions, including a deal by China's top refiner Sinopec in April to acquire a stake in a Canadian oil sands project for 4.65 billion dollars.

PetroChina -- which is listed in New York, Hong Kong and Shanghai -- said in May that it would invest 60 billion dollars abroad over the next decade in order to secure much-needed resources to fuel China's red-hot economy.

© 2010 AFP

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