China On Energy/Mineral Roll

Chinese firm to buy Addax Petroleum for $8.3B

By Lisa Schmidt, Calgary HeraldJune 24, 2009

CALGARY - Canadian-Swiss oil and gas producer Addax Petroleum Corp. is being acquired by China Petroleum Corp. in a deal valued at $8.3 billion.

China Petroleum Corp, known as Sinopec Group, is China’s largest producer and supplier of oil products and major petrochemical products. Under the agreement announced Wednesday, Sinopec will pay $52.80 per Addax share, a 47 per cent premium to the stock price on June 5, when Addax confirmed it was in negotiations with an unnamed buyer.

Addax produced 134,730 barrels of oil per day during the first quarter, primarily from Nigeria, as well as its operations in the Middle East.

The company also recently announced first international oil exports from the Taq Taq field in the Kurdistan region of Iraq, which it and joint partner Gelen Enerji of Turkey expect to flow 100,000 barrel per day.

China’s ability to access cash reserves has made it a bidder on international oil opportunities, such as in Syria, Russia, Libya and Canada.

Sinopec this year upped its stake in the Northern Lights oilsands project to 50 per cent. It was one of three deals made in Canada since 2005, when CNOOC invested in oilsands junior MEG Energy Corp.

In addition to Sinopec’s purchase of a stake in Northern Lights, CNPC bought oilsands leases it has not yet developed.

Sinopec and other Chinese companies have been considering overseas acquisitions of oil and gas assets worth as much as $12 billion US, the South China Morning Post has reported, citing unidentified industry sources.