Indian and Chinese oil firms will sign agreements aimed at bidding jointly for foreign oil and gas projects and reducing cut-throat competition, a top Indian official told Reuters on Tuesday.

The energy-hungry Asian giants, which have stretched global supplies and contributed to the record rise in oil prices, are competing for stakes in foreign oil and gas projects to secure supplies.

Indian firms will sign separate memoradums of understanding (MOUs) with Sinopec Corp, China National Petroleum Corp. and CNOOC, the head of Indian oil ministry's international division said.

"They have given a very specific and strong commitment for cooperation," Talmiz Ahmad told Reuters after a visit to China.

Indian firms likely to sign the MOUs include Oil and Natural Gas Corp, its overseas subsidiary ONGC Videsh, Oil India Ltd., Indian Oil Corp., Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd, he said.

"A senior executive in a Chinese company said joint bids from India and China would be so formidable that there are no targets which will not be accessable," Ahmad said.

The agreements would be signed when India's oil minister, Mani Shankar Aiyar, visits China later this year, he said.

"An inter-governmental joint working group will be set up to monitor the cooperation and give it the necessary momentum."

Aiyar said in February that the two countries may jointly bid for some foreign projects and compete in others.

In April, a joint statement issued during Chinese Premier Wen Jiabao's visit to India said the two countries agreed to cooperate in their quest for energy security.

Asian oil firms have spent billions of dollars on projects around the world, including in countries such as Sudan that are off-limits to oil majors, and picked up scraps hived off by cost-cutting Western oil companies.

Chinese oil giants have been scouring the globe for energy assets in the last five years, spending over $5 billion in projects from Australia to Indonesia and Sudan to Saudi Arabia.

Similarly, India, which imports 70 percent of its crude oil requirement, has stakes in projects in several countries including Myanmar, Sudan, Russia, Libya and Australia.

India's hunt for oil projects is led by state-run exploration firm ONGC, but the country's largest refiner, Indian Oil Corp. has also joined the race and won an exploration block in Libya.

Source: China Daily\Reuters