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Last Updated: Thursday, 13 October 2005, 16:02 GMT 17:02 UK
BP puts $2.2bn into Rockies field
BP chief executive Lord John Browne
Lord Browne's ambitions in China may have taken a knock
UK oil firm BP plans to invest up to 1.25bn ($2.2bn) to double production from its share in a gas field in America's Rocky Mountains.

The project, which involves drilling about 2,000 wells, is part of a $15bn programme to develop its US operations.

Earlier, the FT reported that BP was ready to buy a large chunk of Sinopec - China's biggest maker and marketer of refined crude products.

But, according to Reuters, Sinopec rebuffed a bid by BP to take a stake.

BP said the development of the Wamsutter field in the Rocky Mountains, Wyoming, was part of its strategy to develop secure energy supplies from the US.

"This major investment follows more than two years of focused accelerated drilling and technical studies which revealed the untapped potential of the Wamsutter resource," said Tony Hayward, chief executive of BP Exploration and Production.

Chinese doubts

On Thursday, the FT reported that top level talks between BP and Sinopec had been going on for some time and that BP boss Lord Browne "has big ambitions for China".

We doubt that BP would be willing to enter a JV on the scale of TNK-BP at this stage
Citigroup

But, even though it is listed on the Hong Kong stock exchange, Sinopec is still mostly state-owned and it is believed that its leaders were not prepared to relinquish a significant share of the nation's oil wealth.

"BP has misread what the Chinese want...They (the Chinese) said 'no'. They've said they're not doing it," a source told Reuters.

It would not have been BP's first foray into setting up a large foreign partnership - the company has invested $14bn (8bn) in setting up its TNK operations in Russia since 2003.

Meanwhile, on Thursday, BP announced it had signed a letter of intent with India's Hindustan Petroleum Corp to buy a 26% stake in the state-run company's new Bhatinda refinery in the northern state of Punjab.

However, analysts were surprised that BP would seek to make such a bold move in China, where retail fuel prices are capped and from where it can be difficult to bring profits back home.

"We doubt that BP would be willing to enter a joint venture on the scale of TNK-BP at this stage," said Citigroup.

"More likely, BP is looking for incremental project investment opportunities in the Chinese downstream market."




SEE ALSO:
BP sells chemical unit for 5bn
07 Oct 05 |  Business
Hurricanes set to cost BP $700m
04 Oct 05 |  Business
Strong oil demand lifts BP profit
26 Jul 05 |  Business
BP in $2bn Saudi investment deal
08 Jun 05 |  Business
Rising oil prices boost BP profit
26 Apr 05 |  Business
TNK-BP gets $936m Russia tax bill
11 Apr 05 |  Business


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