China Oilfield Services Ltd (COSL), the nation's largest service provider for oil firms, said the Russian government blocked its planned acquisition in the country.
An investor relations manager at COSL, a unit of China National Offshore Oil Corp, said that Moscow late last year rejected its deal to buy a stake in STU, a service unit of TNK-BP, without giving a reason.
COSL signed an initial agreement to acquire a majority stake in STU in 2006 and had obtained approval from the mainland government.
It was reported that the deal was worth just over US$10 million, a fraction of COSL's total net assets of 9.47 billion yuan at the end of June last year.
Despite the deal's tiny size, chief executive Yuan Guangyu said in August last year that Russia - the world's top gas producer and one of the biggest oil producers - was 'very attractive' and COSL wanted to get a foothold in the vast market.
He said the acquisition would not pose a strategic threat to Russia due to its indirect service nature, as opposed to direct resource exploitation in the oil and gas production business.
Mainland energy firms have been frustrated in recent years by political opposition when seeking overseas purchases. CNOOC, another listed unit of China National Offshore Oilfield Corp, withdrew a bid in 2005 to buy United States oil firm Unocal for US$18.5 billion in the face of intense opposition by US politicians.
