China Petroleum and Chemical Corp (Sinopec Corp) has agreed to set up a joint venture with its parent company to buy $3 billion worth of oil and gas assets held by the latter in a bid to improve its profitability.

The 50/50 venture between a wholly-owned subsidiary of Sinopec Corp and Sinopec Corp's parent, China Petrochemical Corp (Sinopec Group), will buy oil and gas producing assets with 310 million barrels in proven and probable reserves.

"The transaction will boost Sinopec Corp's profitability," Sinopec Corp, Asia's largest refiner, said on Sunday.

The deal would boost Sinopec Corp's proven reserves by 9.1% to 3.1 billion barrels of oil equivalent (boe), and its annual crude production would rise 11.2% to 365 million barrels, the statement said.

Sinopec Corp said a year ago that it was considering buying more overseas upstream assets from its parent to boost oil and gas production and counter mounting losses from selling gasoline and diesel at state-controlled prices.

The company did not give details such as the location of the assets.

Scott Darling, head of Asia oil and gas research at Barclays Capital, said in a report that the assets were located in Kazakhstan, Colombia and Russia.

Sinopec Corp officials were not immediately available for comment.

Sinopec Group has spent around $40 billion buying global assets in the last three years, including the $7.24 billion purchase of Swiss explorer Addax Petroleum Corp in 2009 to gain access to fields in West Africa and Iraq's autonomous Kurdistan region.

The parent may inject only as much as half of its global oil and gas reserves into Sinopec Corp as it holds onto assets in volatile countries such as Syria, far from enough to cut the unit's exposure to unprofitable refining at home, analysts say.

At least half of the group's overseas assets are in countries such as Syria, Argentina and Russia, where the reserves are either of poorer quality, too small or in areas fraught with high political risk, analysts say.

Sinopec Corp made its first, and so far only, acquisition of overseas upstream assets in 2010, when it bought deepwater oilfields in Angola from its parent for $2.46 billion.

For the latest purchase, Sinopec Corp will contribute $1.5 billion, using internal funds and loans, and will also take management control of the venture, it said.

Sinopec Corp on Sunday reported a 12.8 % fall in 2012 net profit, due to a drop in revenues from its upstream and chemicals businesses.

Its refining division made an operating loss of 11.95 billion yuan ($1.92 billion) in 2012 under Chinese accounting standards, compared with a loss of 37.6 billion yuan the previous year.