China National Petroleum Corp (CNPC) said yesterday it plans to buy a firm involved in petroleum exploration in Oman for $50 million, the latest in a flurry of overseas acquisitions by state controlled Chinese oil companies.

CNPC (Hong Kong), controlled by China's largest crude oil producer CNPC, said in a statement it intends to buy a 50 per cent stake in Mazoon Petrogas (BVI) Ltd from Mazoon Petrogas SAOC for $25 million, to increase its oil reserves and boost earnings.

The other half of Mazoon Petrogas (BVI) has been bought by Rolly Co Ltd, an indirect wholly-owned subsidiary of CNPC, for the same amount.

"I don't think investors will expect a lot out of the deal. And the Sinopec results could also cast worries over CNPC's earnings," said Alex Wong, research manager at OSK Asia Securities.

Sinopec, China's second largest oil company, said yesterday its net profit for the first quarter of 2002 dropped 86 per cent to 542 million yuan ($65.46 million) due to a price slump in domestic crude oil, oil products and petrochemicals.

Meanwhile, the CNPC statement did not give details of the company's operations or reserves. Both Mazoon companies are unlisted.

As Chinese oil production dwindles, the government has urged state oil firms to look beyond national borders for crude supplies to relieve dependency on oil imports and volatile world oil prices.

The parent CNPC has assets in Sudan, Azerbaijan, Kazakhstan and Myanmar, and is also the parent of China's top oil company PetroChina 0857.HK.

PetroChina said earlier this month it would pay US$216 million to buy stakes in oil and gas fields in Indonesia and analysts expect it to announce further acquisitions soon.