State-run Oil & Natural Gas Corp (ONGC) and China's largest government-owned energy firm, CNPC have agreed to expand their existing upstream partnership to refining and marketing of oil and gas.

The companies have "agreed to foster their cooperation .... by expanding cooperation in upstream exploration & production areas, refining or processing of crude oil and natural gas in midstream or downstream projects, marketing and distribution of petroleum products and construction and operation of oil and gas pipelines," ONGC said in a statement issued on Wednesday.

The agreement was signed after CNPC chairman Jiang Jiemin met oil minister Jaipal Reddy in New Delhi on Monday, officials said.

CNPC, which is a partner of ONGC in producing blocks in Sudan and Myanmar, had been persuading ONGC to forge a comprehensive agreement that could provide it access to India's oil and gas assets. ETfirst reported it on Dec 29, 2010.

But ONGC's statement does not specify particular countries where the two companies would partner. "The areas of cooperation between ONGC and CNPC will also extend to joint participation in suitable hydrocarbon projects in other countries of interest by exchanging information and working for mutual growth and benefit by extending cooperation in hydrocarbon sectors globally," the statement said.

According to industry experts, CNPC sees opportunities in India's emerging energy sector. Besides exploration & production, it is eyeing domestic engineering and oil-field service opportunities, a senior executive, working in a state-run oil company said requesting anonymity.

ONGC's collaboration with cash-rich CNPC will help the state-run explorer finance major projects besides sourcing ultra-deepwater technology. The partnership will also help ONGC in acquiring cheaper oil and gas assets overseas by reducing stiff competition from CNPC and its arm PetroChina.

ONGC chairman and managing director Sudhir Vasudeva said in the statement that the company had "positive and productive experience of working with CNPC."

"It is important that henceforth we collaborate with more management engagement on important global assignments beyond the current projects so that the interests of both the companies are mutually served," Vasudeva said.

Chinese firms also have joint ventures with ONGC, in Syria and Colombia. In 2005, CNPC and OVL jointly bought a 38% stake in Syria's Al-Furat Petroleum Company that owns 39 oil and gas fields. OVL jointly owns oil and gas fields in Colombia with public-listed integrated Chinese energy and petrochemical firm Sinopec Corp.

"ONGC's achievements are truly impressive; its comprehensive E&P infrastructure is something that only a few companies worldwide can boast of and its strong financials are a cogent attestation of the efficient leadership at the top and sound fiscal management," CNPC chairman Jiang Jiemin said in the statement.