The Chinese government has confirmed it granted PetroChina approval in June to take a stake in Nippon Oil Corp's Osaka refinery, a move to feed growing demand for oil in China.
The National Development and Reform Commission said on its website on Friday that the approval for the purchase in Japan's largest refiner had been given to PetroChina International Co. in June, without giving details.
The two companies agreed in May last year to establish a joint venture to operate the refinery with a capacity of 115,000 barrels per day.
The Chinese oil giant would acquire a 49 percent stake in the venture and Nippon Oil would own the other 51 percent, they said.
Dai Peng, analyst with the Zheshang Securities, said the deal between the two oil giants will allow PetroChina to use surplus capacity of the Japanese company to refine oil. It is also an important step for PetroChina to expand its operation in Asia, he said.
Yang Wei, analyst with the Guotai Junan Securities, echoed with Dai, adding the deal will help cut refining cost for PetroChina as the company has a large output of oil overseas.
They both agreed the purchase would have little impact on PetroChina's performance in a short term.
Nippon Oil has provided PetroChina with refining services since 2004.
(Xinhua News Agency July 11, 2009)