PetroChina Co. is seeking to invest in Russian gas fields as part of efforts by the two countries to conclude gas-supply negotiations that have dragged on for almost a decade, four people with knowledge of the matter said.

PetroChina, the publicly traded unit of state-owned China National Petroleum Corp., is interested in spending at least US $10 billion for a minority share of eastern Siberian gas fields operated by OAO Gazprom and OAO Rosneft, said three of the people, who asked not to be named as deliberations are private.

“PetroChina is willing to promote all-round cooperation with Russia’s oil companies, and hopes to invest in Russia’s upstream oil and gas exploration and development businesses,” spokesman Mao Zefeng said in an e-mailed response to questions from Bloomberg News.

The two countries are seeking to complete a deal that would see Russia supply as much as 68 Bcm of gas a year, helping to meet the energy needs of Asia’s biggest economy. A $10 billion acquisition would mark PetroChina’s biggest-ever purchase abroad, data compiled by Bloomberg show.

“Investing in the gas fields is a key step to concluding gas supply deals with Russia,” said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. “China is a large gas market and Russia holds the world’s biggest reserves, so it’s an ideal deal for both.”

Corruption Probe

Gas-supply talks between Russia and China started in 2004 and have dragged on as the countries disagreed over price. Two people familiar with Gazprom’s thinking, who spoke on condition of anonymity, said the company would be reluctant to sell stakes in its eastern Siberian fields.

PetroChina’s Mao said China’s biggest oil and gas producer doesn’t have any more information to disclose on its Russian plans. “Such a proposal isn’t even discussed,” Sergei Kupriyanov, a spokesman at at Gazprom in Moscow, said by phone. Rosneft’s press service declined to comment.

PetroChina has been rocked recently by a corruption probe that caused the company to remove four senior managers. Former Chairman Jiang Jiemin, who left PetroChina in March, was removed from his post as head of the state assets regulator and is under investigation, the official Xinhua News Agency said Sept. 2.

Siberian Fields

Gazprom and CNPC plan to sign a contract for Russian gas supply to China by the end 2013, the Russian producer said on Sept. 5 after striking an accord outlining terms of future shipments during the G20 meeting in St. Petersburg. Gazprom has a monopoly on Russian gas exports.

The assets PetroChina is interested in are located near the Siberia to Far East pipeline that Gazprom plans to build, two of the people said. The pipeline, which will supply China and bring gas to the LNG plant for supplies to Japan and Korea, may become fully operational by late 2017, according to Gazprom’s website.

In eastern Siberia, where the pipeline to China and the Pacific coast will originate, Gazprom is developing the Chayanda field, with estimated reserves of 1.2 trillion cubic meters of gas, and the Kovykta gas field with estimated reserves of 1.5 trillion cubic meters, as well as other fields. Eastern Siberian fields contain components such as helium, meaning processing facilities will need to be built.

Price Hedge

Buying a stake in the Russian fields would help PetroChina hedge any higher natural gas import prices China might have to pay because the company would get part of the venture’s profits, one of the people said. Attempts to strike a deal could fall apart because of the political complexities involved, the people said.

CNPC agreed this year to buy 20% of the Yamal LNG development controlled by OAO Novatek, Russia’s second-biggest natural-gas producer after Gazprom. The $20 billion Yamal project is being built in the Russian Arctic.

State-run Rosneft signed a $270 billion supply deal with CNPC in June, which would make China the biggest market for Russia’s oil by 2017.

Rosneft CEO Igor Sechin told reporters in Vladivostok on Aug. 31 that he had just come back from a trip to China and that there was “active work with strategic partners, supporting our positions on markets in the Asia- Pacific region.”

Rosneft will supply about 360 million metric tons of crude to China over 25 years, Russian President Vladimir Putin said on June 21 in Petersburg. Rosneft, which became the world’s biggest producer by output after buying TNK-BP for $55 billion this year, has been boosting supply to the Asia-Pacific region and away from Europe, where demand is stagnant.