BEIJING/SINGAPORE (Reuters) - China's Sinochem Corp has abandoned efforts to make a rival offer for Potash Corp as part of plans to spoil BHP Billiton Plc's $39 billion bid for the Canadian fertilizer maker, sources with knowledge of the matter told Reuters.

The Chinese state-owned chemicals group was not expected to formalize its decision but three sources said on Friday it had given up on efforts to put together a consortium to thwart BHP's hostile offer.
""It's finished,"" one of the sources said. Another source said the idea of Sinochem forming a counterbid had faltered in recent weeks.
""I'd be surprised if the Chinese formalized their withdrawal, but there's no ... way they are doing anything. It's been dead for five to six weeks,"" one source said.
The sources declined to be identified because they were not authorized to talk to media.
Sinochem had hired Deutsche Bank and Citigroup to explore options to foil BHP's offer, sources had previously told Reuters. Both banks declined to comment.
China's main worry is that a BHP takeover of Potash could push up the price of potash, a nutrient essential for boosting grain production to meet booming food needs.
Political obstacles in Canada meant any Chinese bid would have to be part of a consortium to succeed.
Sinochem had approached Singapore's Temasek Holdings to join a consortium that might bid but the state investor had made no decision, sources have previously told Reuters. Temasek declined to comment on Friday.
Sinochem spokesman Li Qiang declined to comment on its plans or whether it had withdrawn, but said it was still monitoring developments. Sinochem has never publicly stated its intention to bid for Potash.
----Offer rejected
Potash, the world's top fertilizer maker, has flatly rejected BHP's $130 per share offer and is seeking a white knight to fend off the world's biggest miner. Potash shares last traded at $147.17, suggesting investors were expecting it to raise its offer.
While a potential Chinese-led bid was seen as a threat to BHP's ambitions, it still faces regulatory and political hurdles. Potash on Thursday asked a U.S. court to compel BHP to produce all communications with regulators and governments related to its bid.
Sources close to Sincohem told Reuters last month the company had a team of 20 people working overtime to come up with options to stall the BHP bid.
Officials in Potash Corp's home province of Saskatchewan have voiced concerns about Chinese ownership of the world's largest fertilizer supplier. The government, which relies on the company for billions of dollars in royalty revenue, fears the Chinese would work to hold down prices for the agricultural input that the country needs to feed its growing population.
For that reason, the Chinese government has put pressure on its state-owned industries to lead a challenge to the BHP bid.
Photo: Rocanville Potash Corp miner Nigel Kalyniak works on a potash miner roughly 1000 meters (3280 feet) below surface in Saskatchewan September 30, 2010. (Photo: Reuters/David Stobbe)