China National Offshore Oil Corp has been offered Royal Dutch Shell's oil business in Australia's North West Shelf oil and gas project, The Australian newspaper reported on Thursday.
The deal, if it goes ahead, could be worth A$500 million (US$450 million), the paper said, without citing sources.
The Chinese government-owned offshore oil explorer already has a 5.3 percent stake in North West Shelf exploration permits, production licenses and related reserves, and any deal would leave Shell with only gas, the paper said.
Hong Kong's South China Morning Post newspaper cited an unnamed source as saying that CNOOC had hired Australian investment bank Macquarie to arrange the potential bid.
Shell Development Australia spokeswoman Anita Harben declined to confirm to the Australian that negotiations were taking place on the grounds of commercial confidentiality, but said that portfolio management was a key source of value for Shell.
CNOOC and Macquarie declined to comment on the stories.
The six equal partners in the North West Shelf joint venture are Woodside Petroleum, BHP Billiton, Chevron Corp, Japan Australia LNG and Shell.