Sinopec buys Occidental's Argentina assets for $2.45b

13:18, December 13, 2010      

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China Petrochemical Corp, parent of Sinopec, agreed to buy all of US-based Occidental Petroleum Corp's oil and gas assets in Argentina for $2.45 billion, marking the energy giant's first foray into the upstream market in the Latin America country.

Sinopec's move adds to a growing list of outbound deals in the natural resources sector by state-backed Chinesefirms in the past two years as the world's most populous nation scrambles to secure resources for its surging economy.

Sinopec - the top refiner in Asia and China's largest oil firm by sales - said in a statement Friday that the takeover was subject to government approvals.

Occidental Petroleum Corp's Argentina units hold interest in 23 production and exploration concessions in Santa Cruz, Mendoza and Chubut provinces in Argentina, the statement said.

As of Dec 31, 2009, the concessions held gross proven reserves plus probable reserves of 393 million barrels of oil equivalent.

Gross production from 22 producing concessions totaled over 51,000 barrels of oil equivalent per day in 2009, according to the statement.

"Overall I do think this is a fair price," Neil Beveridge, analyst at Sanford C. Bernstein in Hong Kong, said of the deal.

"These are very mature on-shore oil assets so it is a good fit with Sinopec's core area of expertise," said Beveridge.

Occidental noted in its 2009 annual report that its concessions in Argentina expire in 2017, and it was looking to extend the terms of its concessions. "However, in the event Occidental is unsuccessful in obtaining these extensions, Occidental will reevaluate its operations," the company said in its report.

Source: Global Times
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