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The deal has been signed ahead of a crucial visit by Russian Prime Minister Dmitry Medvedev to Beijing next week.
CNPC and Rosneft will jointly acquire and develop oil and gas fields of mega reserves in eastern Siberia and the Far East, said a statement on the Chinese firm’s website.
The two companies will set up a joint venture, with Rosneft controlling 51 per cent of the equity and CNPC owning the remaining 49 per cent, according to the memorandum of understanding (MOU) signed on Friday.
Russia is the world’s top oil producer while China is the biggest oil importer.
The oil produced will first meet energy demands in eastern Russia and then be exported to China and other Asia-Pacific countries, said the statement.
The CNPC statement added that the signing of the MOU is a new breakthrough by the two sides in upstream cooperation, and will promote future joint work in downstream businesses and other sectors.
Russia and China signed a $270 billion oil deal in June this year which is likely to make Moscow China’s biggest energy supplier.
Russian and Chinese state corporations had also signed a string of economic agreements including another document paving the way for the long-awaited multi-billion dollar gas deal, during a meeting between Russian President Vladimir Putin and his Chinese counterpart Xi Jinping at the G20 summit in September.