(Yicai Global) Nov. 13 -- Private Chinese conglomerate CEFC China Energy Co. and Russia's largest oil producer Rosneft OAO [MCX:ROSN; LSE:ROSN] signed an oil and gas refining agreement in Danang, Vietnam on Nov. 10.

Ye Jiantan, chairman of CEFC China, and Igor Sechin, Rosneft's chief executive, attended the signing ceremony and expressed their confidence in the cooperation.

The pair plan to set up a plant in Yangpu, Hainan province to create olefins using liquefied petroleum gas and condensate and will set up a joint technical and business working group to lead the project. The two will utilize Rosneft's extensive experience in overseas refinement and petrochemical production to analyze and research the chemical industry process, the long-term supply of raw materials and the monetization of their products.

Russia is one of the world's top three oil and gas producers, but heads of some oil firms told Yicai Global that it was not easy to do business in the country. High policy barriers and risks mean most oil companies are cautious about entering the Russian market and rarely carry out business in depth. There have been few prior cases in which China's private energy firms have joined Russian firms to cooperate in the oil, gas and chemical sectors.

"Working with Rosneft is a milestone for CEFC China, which has expanded its circle of industry partners," Cai Feng, vice president of the Chinese firm's investment division, told Yicai Global. "Continued investment in oil and gas and strong market expansion capabilities allowed the two companies to hit it off," he added.

CEFC China will link its overseas and home businesses through the partnership with Rosneft. The cooperation intends to cover the entire industry chain, from oil and gas development and refinement to sales and financial services, which to some extent can be seen as a new model of Chinese-foreign cooperation in the industry, some analysts believe.

Russia is continuing to expand its oil exports to China. In September this year, it exported 6.35 million tons of oil to the world's second largest economy, up 60.5 percent from the same period a year earlier to maintain its position as China's largest oil supplier for the seventh straight month, according to data from China's General Administration of Customs.