A state-owned oil company from northwest China，s Shaanxi Province has inked a deal with Thailand to explore for natural gas in parts of the Khorat Basin, an oil-rich region 280 kilometers from Bangkok.

The agreement was signed Thursday in Bangkok by Thai energy minister Wannarat Charnnukul and Shen Hao, the chairman of the board of Yanchang Petroleum Group Co. Ltd., Yanchang said on its website Friday.

"It marks a major breakthrough in the company，s international cooperation efforts to explore for oil and gas overseas," the Chinese company said.

According to the agreement, Yanchang Petroleum has been licensed to drill for oil and natural gas on block No. L31/50, covering an area of 3,960 square kilometers in northeast Thailand，s Khorat Basin.

Khorat Basin already has two gas fields in production. Yanchang Petroleum is China，s fourth largest oil company. In 2009, both its crude and refined oil output topped 11 million tonnes.