On March 13, CNPC Chairman Jiang Jiemin, CNPC President Zhou Jiping and visiting Eni CEO Paolo Scaroni had a meeting in Beijing and signed two agreements on equity transaction and joint study respectively.

The two parties agreed that CNPC purchases a 28.57% share of Eni East Africa, owner of a 70% interest in Mozambique's Block 4. Located in the Ruvuma Basin, the offshore Block 4 has identified gas reserves of 75 trillion cubic feet (2.12tcm).

With this $4.21billion deal, CNPC will indirectly acquire a 20% stake in Block 4, while Eni still holds a 50% stake. The remaining shares are held by Empresa Nacional de Hidrocarbonetos de Mocambique (ENH, 10%), Kogas (10%) and Galp Energia (10%).

The completion of the transaction is subject to the fulfillment of certain standard conditions including obtaining all necessary authorizations from Mozambique's authorities.

According to the joint study agreement, CNPC will collaborate with Eni to study shale gas potential of the Rongchang block in China's Sichuan Basin, which covers an area of about 2,000sqkm. The two companies remain in discussion over reaching a production sharing agreement if the block is proven to be technically and commercially feasible for shale gas development.