China’s SINOPEC buys new stakes in Angolan oil fields

14 June 2006

Shanghai, China, 14 June – Chinese oil company Sinopec, the largest in Asia by refinery capacity, has bought three new stakes in Angolan oil fields, with total proven reserves of 3.2 trillion barrels, the Chinese press reported.

Sinopec acquired stakes of 27.5 percent, 40 percent and 20 percent of three offshore oil blocs, which it will explore together with Sonangol, Angola’s state oil company, Shanghai Securities News reported Tuesday.

According to the paper, Sinopec owns 75 percent of joint venture Sonangol Sinopec International.

The 3.2 trillion barrels of proven reserves are expected to increase Sinopec’s production by 100,000 barrels of oil per day when the partnership begins extracting oil from the new blocs, the Shanghai paper added.

The paper did not report the figure paid by Sinopec, but previous reports in the official Chinese press said that Sinopec had offered US$2.4 billion for the stakes.

The deal with Sinopec was concluded ahead of a state visit by China’s prime minister, Wen Jiabao, to Angola, on June 20 and 21, as part of a tour of seven African countries, between June 17 and 24.

Sinopec said in March it would build a new refinery in Angola, also in partnership with Sonangol, at a total investment of US$3 billion.

Sinopec also invested over US$1.5 billion to develop its half of the oil concession of bloc 18 off the Angolan coast, which it explores in partnership with European oil company BP.

Figures published in February by the Angolan ambassador to Beijing showed that bilateral trade between Angola and China in 2005 totaled US$4.2 billion, which made Angola China’s second largest trading partner in Africa, after South Africa.

Angola is the second-largest oil producer in sub-Saharan Africa, after Nigeria, and is expected to double its oil production until it reaches 2 million barrels per day in 2008, according to a study by British consultancy Wood MacKenzie. (macauhub)