Ro Tu Chol, North Korea's deputy prime minister, signed an agreement with Zeng Peiyan, the Chinese vice-prime minister, for their countries to jointly explore and develop oilfields, apparently setting aside territorial uncertainties in seas between the two countries.
Zeng is the chief of China's National Reform and Development Commission, which steers the country's economic development, and Ro also specialises in economic policy.
Zeng said: "it is China's resolute strategy to consolidate and develop the traditional friendship and cooperation" with North Korea, China's official Xinhua News Agency reported.
Chinese energy experts have previously said that disagreements over the sea boundary between their country and North Korea is holding up development of oilfields in the Yellow Sea.
Demand and supply
Chinese and North Korean news reports offered no details about the agreement or how boundary issues were handled. Chinese oil companies were not available for comment.
But Chinese geologists estimated in 2002 that offshore fields in the West Bay basin area off North Korea may contain 3 billion tonnes (21.9 billion barrels) of oil and gas.
As its appetite for oil has swollen in recent years, China has increasingly turned to imports for its needs.
A growing economy has led to a
rise in demands for power
North Korean offshore exploration so far has focused on three basins in the Yellow Sea between it and China.
In late October, Hu Jintao, the Chinese president, visited Pyongyang, where he was feted as an invaluable ally.
Hu and the North Korean leader Kim Jong-Il discussed strengthening economic ties between their two countries, and signed a series of deals for Chinese-funded projects, including iron ore mines, Chinese media reported at the time.
Tang Jiaxuan, a senior Chinese foreign policy official who once served as foreign minister, said the oil agreement with North Korea "shows how close and friendly the two countries are," Yonhap News Agency in Seoul reported on Sunday, citing North Korean radio bulletins.
Tang said the deal reflected the two sides' "keen interest" in energy cooperation.
The oil announcement came as other North Korean officials were also in Beijing for two days of bilateral meetings with Japanese officials to discuss barriers to normalising relations.
The two days of talks, which began on Saturday, have also focused on the 13 or more Japanese citizens that Japan says the North abducted in the 1970s and 1980s.
The Japanese were often used to train North Korean spies. North Korea has returned five abducted Japanese nationals, but Japan says at least eight others may still be alive.
North Korea, China and Japan, as well as the US, South Korea and Russia, are participating in on-off six-party talks directed at ending North Korea's nuclear weapons development.
The last round of talks in early November produced little progress, and a fresh session is scheduled for early 2006.