(Yicai Global) Dec. 23 -- Sinopec Oilfield Equipment, a leading maker of oilfield machinery and an arm of China's state oil major Sinopec, is to set up a joint venture in Saudi Arabia to help introduce its products to the world's second-largest oil-producing nation.

The new JV will cost around CNY20 million (USD2.85 million), some CNY17 million of which will be contributed by Sinopec Oilfield and the rest by its local partner Al Khobar-based Petroleum and Energy Trading Services, the Wuhan-based firm said on Dec. 20. Sinopec Oilfield will have an 85 percent stake.

The new factory will assemble, repair and sell diamond drilling components and rotary drilling bits, according to the statement. Depending on local demand, its business remit can be expanded to include the manufacturing of fracturing equipment and coiled tubing units as well as machine repair and rebuilding services.

Sinopec Oilfield's shares [SHE:000852] fell 2.7 percent today to close at CNY6.16 (88 US cents) apiece. The benchmark Shenzhen Component Index lost 1.7 percent.