China PetroChemical Corporation (Sinopec), China's second largest oil producer, has reportedly made a bid for the takeover of a Russian petroleum company.

The Shanghai Securities Journal reported on Monday that Sinopec had joined Rosneft, Russia's state-owned oil company, to bid for Udmurtneft, a subsidiary of TNK-BP, Russia's second largest oil company.

The outcome of the sale will be decided in July. If successful, Sinopec and its partner would have access to 26 oil fields in Russia.

Sinopec, together with Rosneft, proposed their offer in May.

TNK-BP's key production operations are in the Udmurtia Republic. Udmurtneft produces nearly six million tons of oil annually, accounting for over 60 percent of total production in Udmurtia.

The major rival in the bid for Udmurtneft is ONGC, an Indian state-owned oil company.

Through its subsidiary ONGC Videsh, ONGC and Itera, a subsidiary of Russian gas giant Gazprom, made a joint bid.

The highest bid made to date is US$3.5 billion, but Sinopec's offer was unavailable.

This move by Sinopec is follows previous efforts by Chinese oil companies to gain a foothold in the international energies market. China National Petroleum Corporation (CNPC), China's largest oil producer, successfully acquired Canada-based PetroKazakhstan Inc. for US$4.18 billion last October in the largest overseas takeover ever by a Chinese company.

In January, China National Offshore Oil Corporation (CNOOC), China's largest offshore oil company, made the second largest overseas transaction by a Chinese oil company when it acquired a 45 percent stake in an offshore oil production license in Nigeria for US$2.268 billion in cash.

(Xinhua News Agency June 13, 2006)