The contract is tentatively scheduled to be signed in November, CNOOC chairman and chief executive officer Wei Liucheng said in an interview with the Asian Wall Street Journal.

A China Petroleum official confirmed the planned joint exploration, under the Tainan Basin, but said it was still awaiting approval from the local Taiwan authorities.

"The timetable isn't something our company can decide on our own," the official said.

Wei said the project would mark the first major commercial agreement between major companies from the two sides.

"If this succeeds, it would of course be a very important project for cross-Strait ties," Wei said, noting that CNOOC's interests in the project were more commercial than political.

"We're much stronger in terms of exploration and development capability, and they're much better at refining. It's an excellent union," Wei said.

The sides would contribute equally to the exploration, which would entail seismic testing and drilling over a period of about three years, and then development of wells if significant discoveries were made, Wei said.

He declined to disclose financial terms, and said he would travel to Taiwan in November if the project received the go-ahead.

Taiwan on Sunday took a major step towards boosting links with the mainland, agreeing to ease investment rules and launch new direct postal and shipping links in a bid to boost its ailing economy.

CNOOC reported on Monday a 4.1 percent fall in first half net profit due to higher tax rates.

Currently, CNOOC has interests in 45 crude oil and gas properties in four major areas -- Bohai, Western South China Sea, Eastern South China Sea and East China Sea.

(China Daily 08/28/2001)