Sinochem Corp, a state-owned conglomerate focusing on oil and petrochemicals trading, has paid US$228 million for 24.5 per cent of an offshore oil project operated by PetroChina. It is Sinochem's first foray into domestic oil production and its largest oilfield acquisition to date. Sinochem, parent of Hong Kong-listed fertiliser maker and importer Sinofert Holdings, said it had completed the purchase of 100 per cent of US-registered New XCL China, whose shareholders include investors Trust Company of West, Jefferies & Co and Putnam. New XCL owns 24.5 per cent of the Zhaodong oil block in Bohai Bay, which has water depths of less than five metres. The project, which started production in 2003, recorded daily output of close to 30,000 barrels at its C and D fields in 2005. 'Future development potential of the project lies in the C-4 field to the north of C and D fields,' Sinochem said. 'The acquisition marks our entry into domestic oil exploration and development, which has great significance to our global development strategy.' Sinochem, which had a monopoly in crude oil imports until 1992, is also engaged in oil refining and fertiliser production. Recoverable crude resources owned by the company based on its equity stake amounts to 6.8 million tonnes, and that of proved gas reserves equals 13.9 billion cubic metres. The acquisition of Zhaodong, with annual output of 10.95 million tonnes last year, has brought at least 2.68 million barrels of additional annual output to Sinochem, based on its equity interest. Sinochem's acquisition price is lower than the US$260 million paid last year by Australia-based ROC for a 24.5 per cent stake in the Zhaodong block, which had 61 million tonnes of untapped recoverable crude reserve. Officials with knowledge of the company's oil and gas production business were not available for comment yesterday.