Chinese oil giant CNPC eyes BP’s $1.5bn stake in Oman gas field

China National Petroleum Corp. is in talks to acquire part of BP Plc’s stake in a key gas field in Oman, according to people familiar with the matter.

China’s state-owned oil giant is having advanced discussions with BP for a 10 per cent stake in the Khazzan natural gas field, the people said. The minority stake could fetch about $1.5bn, said the people, asking not to be identified as the matter is private.

No final decisions have been made and others have also expressed interest in the asset, the people said. Representatives for BP and CNPC declined to comment.

BP was in early talks to sell about a 10 per cent stake in the Khazzan natural gas field, Bloomberg News reported in June.

The oil major owns a 60 per cent stake in the project, while its partner Oman Oil Co. still has a 30 per cent stake after it sold a 10 per cent holding to Malaysia’s state oil company in 2018.

China has been stepping up its presence in the Middle East as Beijing wants to increase its global influence and revive ancient trading routes under the Belt and Road initiative. Last year, State Grid Corp. of China agreed to acquire a 49 per cent stake in Oman’s state-owned power transmission company in the first major privatization by the Middle East’s largest non-OPEC oil producer.

CNPC has operations in five Middle Eastern countries, including Oman, according to its website. It started in Oman with an acquisition of a 50 per cent interest in oil field Block 5 in 2002. The Chinese oil giant paid about $1.2bn in 2018 for stakes in two oil and natural gas concessions in Abu Dhabi.

BP shares declined 3.6 per cent Thursday, as Brent crude futures fell the most in more than a month following dramatic US economic data. The recovery in global oil demand is faltering amid the resurgence in coronavirus, even as the OPEC cartel and partners, including Oman, next week plan to resume some of the crude output halted during the depths of the pandemic.