Chinese fund buys into BP

15 April 2008

Mumbai: China has acquired a near-one per cent stake in British oil major BP Plc, worth about $2 billion, newspaper reports said without naming the investor.

Reports, however, hinted that it was the same Chinese state fund that had built up a stake in French oil giant Total.

The State Administration of Foreign Exchange (SAFE), an arm of the central bank that manages China's $1.68 trillion currency reserves, had bought a 1.6 per cent stake in France's Total for about $2.8 billion.

The report coincides with a visit to Beijing by UK's Chancellor of the Exchequer Alistair Darling, who has said sovereign funds are welcome in Britain as long as their investments are commercially, not politically, driven.

China had set up a $200 billion sovereign wealth fund, China Investment Corp (CIC), in  September to better utilise its zooming foreign currency assets.

CIC was funded with part of the Chinese central bank's reserves and is headed by a former vice-finance minister, Lou Jiwei, who has come under fire for its investments in US private equity group Blackstone and investment bank Morgan Stanley.