Sinopec says acquisitions in West difficult

LONDON Tue Nov 13, 2012 10:48am EST

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LONDON Nov 13 (Reuters) - China's Sinopec is looking at joint ventures to expand in developed markets as direct acquisitions have become politically difficult, its chairman said on Tuesday.

The comment from Fu Chengyu comes less than a month after Sinopec completed China's first purchase of oil storage in Europe through a joint venture with trader Mercuria.

It also comes as Sinopec's rival CNOOC Ltd is struggling to win a regulatory approval from Canada for its $15.1 billion bid for Nexen Inc.

"We work with partners internationally. Acquisition (of foreign companies) is not our strategy," Fu Chengyu, chairman of Sinopec Group, told reporters on the sidelines of the Oil & Money conference in London.

"It is because of the current economic situation, people are more sensitive and politicians are more sensitive, so you need to make sure that your investment is considered good by the local people, the local government," he added.

The comments echo those of chairman and chief executive of China's sovereign wealth fund Lou Jiwei, who told Reuters this month he will focus investment on Asia to beat a rise in protectionism in the West.

CNOOC's bid for Nexen began to look shaky after Canada held up Malaysian state oil company Petronas' $5.2 billion bid for Progress Energy Resources Corp.

Sinopec's purchase of oil storage in Europe is seen as yet another step by China towards creating its own super majors as the state uses its $3.3 trillion cash pile to increase its influence over the world market.

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