China and Ecuador have joined forces to develop an oil block in Ecuador that contains proven reserves of 120.1 million barrels of heavy crude.

China’s Sinopec International Petroleum and Ecuador’s state-owned Petroecuador will create a 40:60 joint venture company that will explore and exploit Bloc 42 in Ecuador’s eastern Pastaza Province.

The new joint venture company will seek a $1bn investment to develop the Bloc 42 area, which has two oil fields, Ecuador’s minister of non-renewable natural resources Germanico Pinto said.

Energy-hungry China believes Ecuador is a potential investment target with companies such as PetroChina signing a two-year crude oil contract that ensures Ecuador the sale of its oil.

Ecuador has become one of the biggest targets of Chinese investment in Latin America with direct investment touching $2.2bn.