China National Petroleum Corporation (CNPC), the nation''s largest oil company, will set up a joint venture with Russian oil giant Rosneft to open up to 300 service stations in China.

The joint venture, in which the Chinese company has a controlling stake, will cover oil refinery and retail business, said Rosneft chairman Sergey Bogdanchikov in a report by Xinhua.

CNPC confirmed the deal without disclosing any financial figures.

Last month the two oil giants established a joint venture in Russia to do oil prospecting and extraction business.

Earlier this year CNPC bought US$500 million worth of shares in Rosneft. It bought the shares in Rosneft at US$7.55 per share.

"CNPC''s subscription of Rosneft shares will further expand co-operation and deepen the long-term co-operative relationship," CNPC said in a statement.

The co-operation between Rosneft and CNPC covers many areas, including possible joint bidding for petroleum exploration and development, as well as equity acquisition and the establishment of a joint venture for upstream activities in Russia and downstream activities in China, the statement said.

Analysts said the move signified that China, the world''s second-biggest energy consumer, is marching at a fast pace to enter the Russian energy market. They said the country will enable China to have better access to oil worldwide.

"The new move shows that the foreign oil giants are trying to increase their share in China''s oil market, especially in the retail business, which is the fastest growing market," said an analyst who declined to be named.

China committed to letting foreigners into its oil market as part of its accession to the World Trade Organization in 2001. The retail business was opened at the end of 2004, allowing foreign companies to run a small number of service stations on their own or to operate larger networks with Chinese partners.

French oil giant Total agreed to invest US$220 million in its joint venture with Sinochem Corp, a State-owned oil-trading company, to build a 200-station network in northern China and a 300-station network in and around Shanghai.

BP has set up a joint venture with Sinopec to have 500 petrol stations built in Zhejiang Province, while another joint venture with PetroChina will run another 500 outlets in South China''s Guangdong Province.

Royal Dutch Shell said earlier it planned to add more than 200 stations in East China''s Jiangsu Province through its joint venture with Sinopec over the next six months. Shell has an agreement with Sinopec to build 500 sites in Jiangsu. Of those, 200 have been established.

But the foreign competitors cannot shake the dominance of PetroChina and Sinopec. The two companies now have more than 50 per cent of the retail market, and 90 per cent of the wholesale market. -China Daily