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.

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