China Petroleum Major Afraid To Bid for Russian Firm

China National Petroleum Corporation cancelled plans to bid for Russian oil firm Udmurtneft owned by TNK-BP, the Russian-British joint venture.

However, Indian Oil and Natural Gas Corporation has replaced the Chinese firm in the bid.

There are rumors that CNPC was afraid it could never beat Russian rivals in the $3 billion auction and then decided to get off.

CNPC believes Russian companies such as Sibneft and Russneft would put in more aggressive bids because an acquisition would create synergies with their existing portfolios, the sources said. Sibneft, controlled by Russian gas giant Gazprom, has made a preliminary offer for Udmurtneft. Russneft, which has spent more than $800 million on TNK-BP assets already, is also bidding for Udmurtneft. ?According to our analysis, a Russian company will be the most probable winner in this transaction,? said another source close to CNPC. A CNPC spokesman in Beijing declined to comment.