Following its takeover of Canada-based Tanganyika Oil Co, China Petrochemical Corp, or Sinopec, is continuing its overseas expansion by seeking to acquire Russia-focused firm Urals Energy.

Russian newspaper Kommersant reported last week that Sinopec, China's biggest oil refiner, had offered to pay $130 million for Urals Energy, almost five times higher than the market value of the London-listed oil-producing company.

Urals Energy shares soared 100 percent at the opening of trade the following day.

An anonymous source close to Sinopec said that Urals Energy's high-quality assets are the main reason for Sinopec offering such a high price.

Urals Energy, registered in Cyprus, has key assets in Russia. The proved and supposed oil reserves of the company are estimated at 170 million tons.

"Dulisma oil field, one of Urals Energy's key assets, has a proved oil reserve of 109 million barrels and natural gas reserve of 1,700 billion cu m," the source said.

Sinopec started talks with Urals shareholders in October, the Russian newspaper reported. Sinopec could not be reached for comment.

The Chinese government has encouraged Chinese enterprises, both State-owned and private, to "become bold" in acquiring stakes in overseas enterprises, especially in the energy and resource sectors.

Last week, Sinopec received approval from the Chinese government for the takeover of Canada's Tanganyika Oil Co.

(China Daily December 24, 2008)