India said its national oil companies would team with China's to bid jointly for selected energy assets abroad, cutting the cost of feeding their oil-guzzling economies while making Asia's two fastest-growing economies even stronger competitors in global energy markets.

Leading Indian and Chinese oil and gas companies will exchange draft memorandums of understanding in coming weeks to provide for joint bids, said Talmiz Ahmad, a senior official at India's Ministry of Petroleum and Natural Gas in New Delhi. The two governments will also sign agreements on political and technological cooperation in the hydrocarbon sector.

The development coincides with competing bids from China's biggest oil producer, PetroChina Co., and India's Oil & Natural Gas Corp. to take over Canadian oil company PetroKazakhstan Inc.

PetroKazakhstan, an oil producer and refiner based in Calgary, Alberta, that operates solely in Kazakhstan, has a market value of about $3.4 billion.

An ONGC spokesman would not comment on the bids. Energy analysts have suggested PetroKazakhstan could fetch bids of around $4 billion, helped by the spike in global crude-oil prices.

In an interview, Ahmad said New Delhi's collaboration with Beijing would forge a "formidable" presence in world energy markets. Major Western oil companies see Indian and Chinese national oil companies as a growing threat, analysts said, as they are viewed as willing to take a lower rate of return to secure assets.

"We see this in the long term as a strategic partnership," Ahmad said after returning from a five-day visit to China last week with Indian petroleum-sector officials and executives. "We seemed to be on the same wavelength."

Indian firms likely to sign agreements include ONGC and ONGC Videsh Ltd., its overseas subsidiary, in addition to Oil India Ltd. and Indian Oil Corp. Ahmad said Chinese partners would include China National Petroleum Corp., Sinopec Corp. and China National Offshore Oil Corp.

"I could imagine a company like Cnooc submitting a joint offer [for an energy asset] along with an Indian company," he said. Ahmad said the planned convergence of energy-related activities would not preclude competition between India and China for foreign energy assets.

India and China have been engaged in cutthroat competition in recent years for access to some of the world's richest oil and gas deposits.

Consumption of crude oil is rising sharply in both countries, which are heavily dependent on imported oil. This is proving costly, with crude oil selling for more than $60 a barrel.

The solution adopted by both countries has been to seek so-called equity oil and gas, which is sourced from exploration and development contracts overseas rather than found at home or imported directly from a producer.

Equity oil can cost as little as $10 a barrel, as it is priced at cost plus the expense of extraction, rather than global market prices.

China's giant national oil companies have proved adept at this strategy, beating India's ONGC Videsh to several major leases over the past few years.

But India is catching up, and ONGC recently won exploration rights in Egypt and Qatar. Their rivalry, though, has served to bid up the price of some overseas properties, making some of their investments riskier. Ahmad said the countries wanted their collaboration to minimize this "unhealthy" risk.

"This will help them stand up to the seller in terms of price, if they can work together," said Madhu Nainan, editor of Petrowatch, an online petroleum industry newsletter based in New Delhi.