Singapore Petroleum Co will explore for oil and gas with China National Offshore Oil Corp in its first venture off the Chinese coast.

The company will operate and own Block 26/18 in the Pearl River Mouth Basin in the South China Sea, while China National's Hong Kong-listed unit CNOOC Ltd has the right to take a stake of as much as 51 percent should a discovery be made, the Chinese oil producer said today in a statement.

Singapore Petroleum, the only refiner traded on the city state's stock exchange, has increased regional exploration and production since 2000 to gain from rising oil prices.

"Gaining entry into China will allow Singapore Petroleum to tap its vast market and further strengthen the company's exploration and production portfolio," Singapore Petroleum Chief Executive Officer Koh Ban Heng said in a separate statement.

The drilling permit will give Singapore Petroleum access to an area of about 4,961 square kilometers (1,915 square miles). The company, 45 percent-owned by Keppel Corp, will conduct seismic surveys and drill exploration wells in the area.

"There's great interest in exploring the potential offshore China, so we could keep a continuous flow of new projects for joint exploration of oil and gas resources," said Zhu Weilin, vice president of CNOOC, in the statement today.

China's oil use may rise 6.1 percent next year, the International Energy Agency said in a July forecast.