China National Petroleum Corp. (CNPC), the country's dominant oil and gas producer, has set up an offshore engineering unit as it strives to boost sagging production, a company official said yesterday.

CNPC, which produces most of its oil and gas from onshore fields in China and has overseas production assets, has formed China National Petroleum Offshore Engineering Co. Ltd., he said, in another move to tap the offshore sector.

The new company, with registered capital of 1 billion yuan ($120.8 million, Dh443.33 million), would conduct offshore drilling, engineering and design as well as maintenance of production platforms, state media reported yesterday.

China National Petroleum Offshore will focus on the Bohai Gulf off northeastern China and aims to pump 4 million tonnes a year, or 80,000 bpd, of crude oil by 2010, the Economic Daily said.

In July, CNPC's flagship subsidiary, Hong Kong and New York-listed PetroChina, obtained a licence to explore for oil and gas in waters near the disputed Spratly islands in the South China Sea, as China faces gloomy growth prospect for its onshore production.