China Petroleum and Chemical Corp, Asia's largest oil refiner, yesterday said it will buy a stake in an Angolan oil field from its parent for US$2.46 billion, marking its first foray into upstream exploration and production overseas to cushion the impact of volatile oil prices.

Sinopec, as the company is known, will acquire 55 percent in Sonangol Sinopec International from parent China Petrochemical Corp. Sonangol Sinopec owns a 50 percent interest in Angola Block 18, which has rich gas and oil resources.

On the completion of the deal, the company's proven reserves of crude oil will rise 3.6 percent, or 102 million barrels. Its daily crude oil production will jump 8.8 percent, or 72,520 barrels, the company said.

"This could just be the tip of the iceberg, and Sinopec will continue to reduce its vulnerability to downstream refining by gaining more upstream assets via the parent's worldwide portfolio," said Gordon Kwan, an analyst at Mirae Asset Securities (HK).

Sinopec, which relies heavily on oil refining and imports more than 70 percent of the crude oil it uses, is actively exploring investment in oil and resources overseas. It is also eying assets in Russia, Kazakhstan and Australia owned by its parent.

Su Shulin, chairman of Sinopec, said the parent may inject into the listed company part of Switzerland-based crude oil explorer Addax Petroleum Corp, which the parent acquired last year.

At a press conference to also announce the company's annual earnings, Su said Sinopec's profit in 2009 more than doubled to 61.8 billion yuan (US$9.05 billion) from 28.5 billion yuan a year ago.

Su predicts the price of crude oil will average US$77 a barrel this year based on estimations done by 28 institutions.