China's largest oil refiner, Sinopec, has reportedly launched a takeover bid for Imperial Energy as it looks to expand its overseas presence.

Just recently, Imperial announced that it was in talks with an unnamed third-party – believed to be India's state-owned Oil and Natural Gas Company (ONGC) – over a takeover, with its shares being valued at £12.90 each.

However, a new report in the Telegraph has now revealed that the board of Imperial has now given the go-ahead for Sinopec to start a due diligence programme, with the two firms believed to be close to agreeing a deal worth in the region of £1.3 billion.

Should the deal go through, it would represent the largest takeover by a foreign operator by a Chinese company, while also giving Sinopec control of valuable blocks in Russia and Kazakhstan, where Imperial aims to increase production to 80,000 barrels of oil a day by 2011.

Last month, Sinpopec warned that its profits for the first half of 2008 could be down significantly after the Chinese government ruled that it would not be allowed to pass rising wholesale crude prices onto consumers.