UPDATE 1-China oil firms may bid for Peru's Petro-Tech

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By Tom Miles

HONG KONG, Aug 13 (Reuters) - Chinese state oil firms are preparing bids for Petro-Tech Peruana, a privately-held oil company with offshore assets in Peru which could fetch $1.5-$2.5 billion, sources with knowledge of the situation said.

Several sources said Petro-Tech, owned by private U.S. firm Offshore International Group, was up for sale and several Chinese companies were looking at it, with oil giant CNPC and offshore specialist CNOOC Ltd (0883.HK) (CEO.N) potential bidders.

Nobody at CNPC, the parent of PetroChina (0857.HK) (PTR.N), was immediately available to comment. CNOOC's chief financial officer Yang Hua said he would not comment on any potential bid. Petro-Tech also declined to comment.

Petro-Tech has shallow-water offshore blocks in Peru covering more than 5 million acres. It only produces small amounts of oil and gas, but several discoveries point to greater potential.

In June it made an important natural gas discovery at Block Z-2B, five miles (7.5 km) off the northern coast in Piura, close to its San Pedro field, which was discovered in 2005.

The two fields have reserves estimated at up to 1.2 trillion cubic feet and Petro-Tech estimated they could cost up to $120 million to develop. In April, Petro-Tech found an oil reserve of 1.13 billion barrels at block Z-6, also in northern Peru.

Other companies with offshore interests in the area include Brazil's Petrobras (PETR4.SA)(PBR.N) and BPZ Resources Inc BZP.A, which last month said it could invest up to $600 million in Peru together with Royal Dutch Shell (RDSa.L).

Peru has proven natural gas reserves of more than 13.4 trillion cubic feet and the government wants investors to help boost oil and gas output.

Chinese state-owned metals firms such as steelmaker Shougang Group and gold miner Zijin Mining Group Co Ltd (2899.HK) have already invested in Peru.

Bankers who have advised Chinese companies on previous deals say Beijing's decision makers feel most comfortable looking for acquisitions in areas where they have already invested.

Maps of Petro-Tech's assets as at February 2007 are available in a presentatihere%20Potential%2 0-%20PETRO-TECHv2.pdf Houston-based Offshore International Group is owned by its chairman William M. Kallop. (Additional reporting by Michael Erman in NEW YORK and Terry Wade in LIMA)