Russia lets China in on oil production

Russia's top crude producer OAO Rosneft has agreed to cede a share of its oil riches to China, the world's top oil importer, signing a memorandum on Friday for the joint development of East Siberian deposits.

Russia, the world's top oil producer, has previously preferred to sign long-term supply deals with China backed by multi-billion-dollar loans.

The Russian state-owned company said it signed a memorandum with China National Petroleum Corp to tap oil reserves, including Srednebotuobinsk field.

Rosneft would have a controlling stake of 51 percent in the future joint venture, with CNPC holding the remaining 49 percent.

The deposit is close to the Eastern Siberia-Pacific Ocean pipeline. Rosneft delivers 300,000 barrels per day of oil to China via an ESPO pipeline spur, and earlier this year, it agreed to double supply volumes.

Rosneft, which in March acquired Anglo-Russian oil firm TNK-BP for $55 billion, needs to increase its upstream base to honor its pledge to increase sales to China. Some analysts and observers doubt that Rosneft has enough resources to boost the supplies to China to the agreed level.

CEO Igor Sechin said on Friday that the company has enough resources to reach the targets.

Reuters