Singapore (Platts)--8Jun2011/254 am EDT/654 GMT

China's state-owned China National Development Corp and Cuba's national oil company, Cupet, have signed a framework agreement in Havana to expand oil cooperation, CNPC said Wednesday.

Under the agreement signed on Sunday, CNPC will draw on its expertise in oil and gas exploration and development, engineering services and logistics to assist Cuba to lower operational costs, raise crude oil output and oil recovery, according to a report in the company's newsletter, China Petroleum Daily.

The agreement was signed by CNPC General Manager Jiang Jiemin and Cupet President Raul Peres, and witnessed by Chinese Vice President Xi Jinping and head of the Cuban State Council Raul Castro.

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In late 2010, CNPC won a deal to expand a Cuban oil refinery owned by Cupet and Venezuela's PDVSA from 65,000 b/d to 150,000 b/d. Huanqiu Contracting and Engineering Corporation, a unit of CNPC, was to manage the project, to be financed largely by Chinese banks and backed by guarantees from Venezuelan oil revenues, according to earlier reports.

Meanwhile, Great Wall Drilling Co., another subsidiary of CNPC, has been working with Cuban oil companies to provide drilling services in the region, the China Daily reported.

Since August 2005, GWDC has drilled 63 wells along the coast from Havana to Varadero, of which 31 are contracted with Cupet, and the rest with other Cuban oil companies. Total output of oil and natural gas from these wells has reached 13 million barrels of oil equivalent, the report said.

--Calvin Lee, calvin_lee@platts.com