China National Petroleum Corporation (CNPC), China's largest oil producer, announced Wednesday that it bought Russia's OAO Rosneft 66.2252 million listed shares for 500 million U.S. dollars at 7.55 U.S. dollars per share.

China National Petroleum Corporation (CNPC), China's largest oil producer, announced Wednesday that it bought Russia's OAO Rosneft 66.2252 million listed shares for 500 million U.S. dollars at 7.55 U.S. dollars per share. [Xinhua]

Rosneft, one of Russia's oil giants, is scheduled to go public on both London and Moscow stock exchanges on Wednesday. Raised 10.4 billion U.S. dollars by last Friday, the IPO is considered one of the biggest in the world.

The move signified that China, an economic powerhouse that is thirsty for oil, is marching at a fast pace to enter the Russian energy market, and it will enable China to have better access to oil worldwide, according to analysts.

CNPC in a statement on its website confirmed it was allocated only 500 million dollars worth of shares by Rosneft, just one-sixth of the three billion dollars it had sought.

"CNPC's subscription of Rosneft listed shares will further expand the cooperation and deepen the long-term cooperative relationship," a spokesman said in the statement.

After receiving Rosneft's invitation to subscribe its listed shares, CNPC kept a close track of the IPO process, said a spokesman with CNPC.

According to him, based on its long-term development strategy and comprehensive evaluation, CNPC officially submitted its subscription proposal to Rosneft on July 12.

CNPC's subscription proposal gives full consideration for supporting Rosneft's successful listing, and aims at boosting pragmatic cooperation of the two companies. Based on the asset evaluation, CNPC made a subscription plan responsive to share price range, he said.

The actual share price of Rosneft conformed to CNPC's proposal. CNPC's subscription of Rosneft listed shares will further expand the cooperation and deepen long-term cooperative relationship, said the spokesman.

However, the 500 million U.S. dollars sum is till out of the expectation of the market as previous reports had said that CNPC wanted to buy up to three billion U.S. dollars worth of Rosneft's stake.

Britain's BP and Malaysia's Petronas also invested in the IPO of Rosneft.

According to the spokesman, CNPC and Rosneft have developed a sound cooperative relationship for mutual benefits and win-win solution. The two companies set up a fundamental principle of complementary cooperation for common development in a long-term cooperation agreement signed in July 2005.

During Russian President Putin's visit in China this March, the two companies signed a protocol agreement for an integrated cooperation, which includes petroleum exploration and development in Russia, and refining, processing and marketing in China.

As one of the largest oil companies of Russia, Rosneft has proven oil reserves of 18.942 billion barrels oil equivalent, including 14.9 billion barrels of oil reserves and 691.1 billion cubic meters in natural gas reserves.

Its crude oil production reached 74.6 million tons in 2005, and natural gas production 13.1 billion cubic meters. It is estimated that Rosneft will produce 115 million tons of crude oil in 2010 and 127 million tons in 2015.