Yantai Xinchao Industry Co Ltd, a privately held property company, said that it was close to buying oilfields in Texas, the United States, for 8.3 billion yuan ($1.3 billion) through a limited liability partnership.

The Shandong-based company's moves come amid expectations that China would loosen controls over crude imports and production by welcoming more private capital into the sector.

In a regulatory filing to the Shanghai Stock Exchange, Yantai Xinchao said the oilfields in Howard and Borden counties would be bought from Tall City Exploration and Plymouth Petroleum, two Nevada-based companies.

Yantai Xinchao said it signed a letter of intent on Friday with Ningbo Dingliang Huitong Equity Investment Center, a limited liability partnership, and its seven shareholders to buy the oilfields through a Ningbo Dingliang subsidiary, Moss Creek Resources Llc.

Limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities.

The deal has been "approved by the US Treasury's Committee on Foreign Investment", the company said.

This is not the first time for the Chinese real estate company to acquire energy assets in a well-developed region as the domestic housing market seems to be floundering.

In May, the company announced plans to pay about 2.2 billion yuan for another oilfield in Crosby, Texas, with proven reserves of about 25 million barrels.

Hu Guangjun, general manager of Yantai Xinchao, said that the company is going through a transition amid a sluggish domestic housing market.

"Oil and gas fields are our first acquisition target, because oil is a very mature sector in the US with good investment environment and high-level of specialization during production," he said.

To peel off the property business, the Shandong-based company sold a 50 percent stake in Yantai Dadi Co Ltd, a subsidiary of the company in the property sector, for about 1.5 billion yuan to Shandong Jiayu Shengyu Venture Capital Co Ltd, just a week before the deal.

Shares of the company have been temporarily suspended following the announcement of the major acquisition.

Experts said that the deal is a reflection that many Chinese companies are moving from their core business into the oil and gas sector to stay profitable, as the government is expected to give more licenses to private companies.

"There is a signal that China will open up more in the fields of both crude production and trade, and more import licenses will be given to private refineries," said Gao Jian, a senior analyst at SCI International, a commodity market information provider.

"As a result, more private companies, even non-energy firms, will be encouraged to move into a slowing-down but still high-margin sector."

The government has issued five import licenses so far this year to independent refineries to break the dominance of State-owned companies and create a more competitive and efficient energy sector.

Gold retailer Goldleaf Jewelry Co acquired Texas-based energy firm ERG Resources Llc for $665 million.

At the same time, large cash-rich companies are looking for good-quality assets on the cheap, as undervalued oil assets present good buying opportunities due to a sharp fall in crude prices.

"This is one of those investments that could make you a bottom-fisher," he said.

lvchang@chinadaily.com.cn