Sinochem Corp, a state-owned conglomerate focusing on oil and petrochemicals trading, has paid US$228 million for 24.5 per cent of an offshore oil project operated by PetroChina.
It is Sinochem's first foray into domestic oil production and its largest oilfield acquisition to date.
Sinochem, parent of Hong Kong-listed fertiliser maker and importer Sinofert Holdings, said it had completed the purchase of 100 per cent of US-registered New XCL China, whose shareholders include investors Trust Company of West, Jefferies & Co and Putnam.
New XCL owns 24.5 per cent of the Zhaodong oil block in Bohai Bay, which has water depths of less than five metres.
The project, which started production in 2003, recorded daily output of close to 30,000 barrels at its C and D fields in 2005.
'Future development potential of the project lies in the C-4 field to the north of C and D fields,' Sinochem said.