China's Shaanxi to tap overseas oil -paper

BEIJING, April 10 (Reuters) - Shaanxi Yanchang Petroleum Group, China's top regional oil producer, will tie up with a Hong Kong-listed firm to tap oil blocks in Madagascar as it embarks on its first overseas venture, state media said on Thursday.

Shaanxi Yanchang signed a deal on April 3 with a unit of Sino Union Petroleum and Chemical International Ltd (0346.HK) to explore Madagascar's Oilfield Block 3113, the China Business News said, quoting Hui Chi Ming, Sino Union's chairman.

Each side will provide 50 percent of the investment needed to explore the block and the deal had won approval on April 7 from Madagascar's Office des Mines Nationales et des Industries Strategiques, its industry regulator, the report said.

Oil reserves in the block were estimated to be no less than 270 million tonnes, the newspaper said, citing forecasts made by a U.S. oil evaluation agency.

It did not say whether the reserves are proven reserves or geological reserves, nor did it say how much investment was needed or what share each side would own of potential output.

Madagascar Energy International Ltd, a wholly owned subsidiary of Sino Union, won in 2007 eight years of oil and gas exploration rights, 25 years of oil production rights and 35 years of natural gas production on block 3113.

The block covers 8,320 square kilometres, company data presented to the Hong kong Stocks Exchange showed.

(Reporting by Jim Bai; editing by Dominic Whiting)