Page last updated at 12:52 GMT, Thursday, 25 June 2009 13:52 UK

Chinese oil refiner in record bid

Sinopec petrol station in Shanghai
Sinopec is looking to invest overseas

Chinese oil refiner Sinopec has made a $7.2bn (£4.4bn) bid for oil exploration and producing firm Addax, which focuses on Africa and the Middle East.

The deal, which still requires approval by regulators, would be the largest foreign takeover by a Chinese firm.

Sinopec said the acquisition marked a crucial step in its "globalisation".

China has been seeking to expand its access to natural resources abroad in recent years in response to its rapidly expanding economy.

Sinopec is trying to expand its direct access to oil reserves and shift away from its reliance on refining oil.

"We trust that this acquisition suits Sinopec's strategic goals, that it will strengthen Sinopec's presence in west Africa and Iraq and is a major step in its globalization," said Sinopec in a statement.

Resistance

The firm's move is "more than an indication of China's appetite for energy resources," said Shang Jin Wei, an economics professor at Columbia University.

"I read it also as a reflection of its desire to diversify its foreign assets holdings away from their US securities."

Expectations that the dollar will weaken further has prompted China to seek to invest its vast reserves elsewhere, argue analysts.

But the latest move to tap into foreign resources comes after several attempts have failed, following resistance from the countries involved.

In 2005 China National Offshore Oil Company (CNOOC) dropped an $18.5bn offer for the Unocal oil firm after meeting political opposition in the US.

And earlier in June this year, a planned $19.5bn investment from Chinalco for Anglo-Australian mining company Rio Tinto was dropped after political resistance in Australia.



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