SINOCHEM Corp, a leading Chinese oil and chemical products trader, has acquired a stake in an offshore oil field in China's northeastern Bohai Bay for US$218 million, marking its maiden foray into domestic oil exploration.

State-owned Sinochem said it had bought a 24.5 percent stake in the Zhaodong block from NEW XCL-China LLC, an independent firm registered in the American state of Delaware. "This acquisition means Sinochem has ventured into domestic oil exploration and production sector, and it is also a key supplement to our global oil business map," said Han Gensheng, a vice president of Sinochem.

Beijing-based Sinochem started overseas oil and gas exploration in 2002, and now has operations in countries including Ecuador, Tunisia and United Arab Emirates, it said. The Zhaodong field, covering 197 square kilometers of shallow waters less than five meters in depth, had a daily oil output of nearly 30,000 barrels in 2005. It started production in 2003.

The Zhaodong permit is 51 percent-owned by China National Petroleum Corp. The remainder was equally held by Australia's Roc Oil Co and NEW XCL before Sinochem's purchase. Roc Oil bought its 24.5 percent stake from Apache Corp last year for US$260 million after Apache announced a global focus shift. CNPC started cooperation with Apache in 1993 in the Zhaodong block, to gain support from the American firm's expertise in the offshore sector.

Meanwhile, the National Development and Reform Commission said it had approved construction of a 300,000-ton crude oil dock in Zhoushan, Zhejiang Province to bolster oil handling capacity in the port city, which has one of China's strategic petroleum reserve bases. Sinochem will be responsible for the construction.

The commission also approved work to upgrade two oil docks in Zhenhai, also in Zhejiang, by Sinopec Corp. The Zhenhai oil depot is China's first strategic tank to start operation.

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