CNPC in Talks to Buy Dalian Oil-Refinery Stake

BEIJING--China National Petroleum Corp. is in talks to buy all or part of French oil major Total SA's stake in an oil refinery in the northeastern port city of Dalian, the Chinese oil giant said.

In a statement, state-owned CNPC said Chairman Wang Dongjin met with a Total vice president earlier this week and discussed a "transfer of equity" in the Dalian West Pacific Petrochemical refinery, which processes 10 million metric tons, or about 200,000 barrels, of crude oil a day.

Total didn't immediately respond to a request for comment.

Total's decision to sell all or part of its 22.4% stake follows a string of asset sales in the region, as global energy companies refocus on their home markets. U.S.-based Noble Energy Inc. has been looking to sell its majority stake in an oil field it owns in northeastern China, while Houston-based Anadarko Petroleum Corp. earlier this year sold its China subsidiary.

The Dalian West Pacific Petrochemical refinery began operating in 1996 after an initial investment of more than $1 billion by its partners. CNPC currently holds a 28.4% stake in the refinery, while China's largest chemical company, Sinochem, is the largest shareholder with a 33.7% stake. The Dalian city government holds the remaining stake.

A person familiar with the matter said the refinery, which has an export license to sell its products abroad, has recorded losses in recent years due to weak Asian demand for refined fuel.

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