Sinopec plays down Imperial bid

By Judy Hua

HONG KONG (Reuters) - Chinese oil refiner Sinopec (0386.HK) on Tuesday warned of tough quarters ahead domestically, as it played down prospects of a counterbid for Imperial Energy Corp Plc IEC.L by its parent company.

"A unit of the Sinopec Group is conducting an internal assessment (on a bid for Imperial Energy), but no decision has been made," Sinopec Corp Chairman Su Shulin told reporters.

Su's comments came minutes before India's largest oil producer ONGC (ONGC.BO) announced an agreed 1.4 billion pounds bid for Imperial, a Russia-focused and London-listed oil group.

Sinopec Corp (SNP.N) (600028.SS) also said it faces a difficult second half of 2008 due to shrinking government subsidies and mounting losses from high crude prices.

A deal for Imperial would mark state-owned Sinopec Group's third major investment in resource-rich Russia.

Executives said the group was in the early stages of examining that and several other overseas deals, including a possible bid for a Peruvian offshore oil company and chasing a stake in an offshore Angolan field being sold by Marathon Oil

(MRO.N).

"Our parent company is doing preliminary work on these deals, but there's been no substantial progress," Su said.