CNOOC and CPC Joint Venture Given O.K.

Taiwan's top China policymaking agency has given the go ahead for state-owned Chinese Petroleum Corp. to jointly explore and drill for oil and natural gas in the Taiwan Strait with mainland China 's China National Offshore Oil Corp., a government official said Thursday.

The Commission of National Corporations has received notification from the Mainland Affairs Council on the approval for CPC to jointly explore and drill for oil and gas in Tainan Basin in the Taiwan Straits with CNOOC, said an official from the commission. The commission oversees state-owned enterprises. CNOOC is one of China's top three oil companies.

This will be the first major joint venture between state-owned enterprises in Taiwan and China. Each company will hold a 50% stake. The deal still has to be approved by Taiwan's Cabinet, the official added.

The two oil companies will set up the joint venture outside Taiwan and China to undertake the planned oil and gas exploration and drilling, said Chen Lie- way, deputy director at CPC's industry relations department. He wasn't able to confirm a local media report that the two companies will likely sign a formal agreement for the joint venture in May, adding that the company hasn't received formal notification from the Mainland Affairs Council. The two companies have been jointly conducting seismic exploration research in Tainan Basin for several years, according to CPC officials.