China state firm in preliminary deal to buy Chevron's Bangladesh gas fields: oil executives

[DHAKA] China's state-run Zhenhua Oil has signed a preliminary deal with Chevron to buy the US oil major's natural gas fields in Bangladesh that are worth about US$2 billion, two Beijing-based Chinese oil executives said.

Zhenhua is a subsidiary of China's defence industry conglomerate NORINCO. A completed deal would mark China's first major energy investment in the South Asian country, where Beijing is competing with New Delhi and Tokyo for influence.

Bangladesh, though, holds the right of first refusal on the assets and could block the transaction. The country, via its national oil company Petrobangla, is keen to buy the gas fields and is talking to international banks to raise financing, according to a banking source familiar with the process.

Bangladesh is in the process of hiring global energy consultant Wood Mackenzie to assess the fields' reserves before placing a formal bid to buy the assets, two Bangladesh sources familiar with the matter told Reuters.

The Bangladesh sources said they were not aware of Zhenhua Oil's competing interest in the Chevron fields.

REUTERS