Chinese oil firm wins bid for BP unit

China Petrochemical Corp, parent of China Petroleum & Chemical, won a bid in partnership with Rosneft for a unit of BP in the first significant foray into the Russian oil and gas market by a Chinese oil major.

The amount of the bid was not released or the shareholding split between China Petrochemical and Rosneft. Some industry experts say the deal could cost some $3 billion.

Interfax reported that China views the decision to sell Udmurtneft to China Petrochemical as a political decision that demonstrates Russia's willingness to increase energy cooperation with China.

The acquisition would strengthen ties between China Petrochemical and Rosneft, while allowing the Chinese company to become a strategic investor in Rosneft's forthcoming $10 billion initial public offering, industry analysts said.

According to a company release, the Russian-British venture TNK-BP said reached an agreement to sell Udmurtneft to China Petrochemical.

The two sides expect to finalize the agreement soon.

In 2005, Udmurtneft produced nearly 123,000 barrels of oil daily; half of this amounted to 6.87 percent of China Petrochemical's average oil and gas output of more than 892,000 barrels of oil equivalent daily last year, the firms said.

The firm did not release whether China Petrochemical intends to offer Sinopec its interests in Udmurtneft.