The deal, announced Friday, falls in line with stated goals of state-owned China Petrochemical, known as Sinopec, "for global expansion in some of its strategically important regions and will further lift the overseas asset proportion of the company total," said He Wei, a senior analyst at BOCOM International Holding Co. in Beijing, China Daily newspaper reports.

Occidental Argentina has gross proven and probable reserves of 393 million barrels of oil equivalent, plus an interest in 23 production and exploration concessions in Argentina, 19 of which the company operates, said a Sinopec statement. Production from Occidental Argentina's 22 producing concessions totaled more than 51,000 barrels of oil equivalent per day last year.

Sinopec's entry into Argentina follows Chinese state-owned oil company Cnooc Ltd.'s investment of $3.1 billion in March for a 50 percent stake in Argentina's Bridas Energy Holdings Ltd., a private energy company.

With backing from Beijing and access to cheap credit, observers say Chinese oil majors are able to take longer-term bets at a time when many Western oil companies are discouraged by Argentina's strict state regulations and a burdensome tax regime.

"China is probably the only country that would actually buy in [to Argentina], because of the political pricing system there," said Laban Yu, oil and gas analyst at Macquarie in Hong Kong, the Financial Times reports.

China surpassed the United States in 2009 as the world's biggest consumer of energy, the IEA says.

Between 1999 and 2009, oil consumption in China increased 93 percent, a recent report by analysts at Macquarie Research states. That compares with a total global consumption increase of 11 percent.

Sinopec also announced in October that it was buying 40 percent of Spanish oil producer Repsol's Brazilian unit YPF SA for $7.1 billion.

The two Sinopec deals -- Occidental and Repsol -- represent the two biggest oil and gas acquisitions in Latin American history, said Scotia Waterous, the oil and gas advisory arm of Bank of Nova Scotia, sole adviser for both deals.

China's upstream oil and gas deals in Latin America this year have totaled more than $15 billion and industry executives expect more to come, the Financial Times reports.

"There is not a single (chief executive officer) of a major oil company in Latin America, not one, who has not been approached by the Chinese," the newspaper quoted an unnamed mergers and acquisition banker at a western bank as saying.

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