Sonangal Sinopec International Ltd - a subsidiary of crude oil
and natural gas producer
China Petroleum and Chemical Corp
) - has entered into an agreement with energy exploration and
Marathon Oil Corp.
) to acquire the latter's 10% stake in Angolan assets.
Per the deal, Sinopec will pay $1.52 billion for block 31 in an
oil and gas field in Angola. This purchase will increase
Sinopec's stake in the block to 15%. Back in 2011, Sinopec bought
5% stake in the block from France-based
) for $983 million.
The Angolan block 31 field is expected to hold proved and
probable reserves of 533 million barrels and is operated by the
). Also, the increased stake will likely add 14,600 barrels of
oil per day for Sinopec.
The sale is part of the $3-billion asset disposal goal set by
Marathon in 2011 to free up its capital and concentrate on its
longer-term high-grade prospects. The agreement is subject to
approval by the Chinese and Angolan governments.
Sinopec, with its head office in Beijing, China, is one of the
largest petroleum and petrochemical companies in Asia. It is the
second largest crude oil and natural gas producer, and the
largest refiner and marketer of refined petroleum products in
China. The company is also the largest producer and distributor
of petrochemicals in the nation.
In April, the company reported first quarter 2013 net income of
15.834 billion yuan (US$2.52 billion), up 23.4% from the
prior-year quarter. Earnings per share of 0.178 yuan ($2.83 per
ADS) also jumped 21.1% year over year, as per the Chinese
Sinopec currently holds a Zacks Rank #2 (Buy), implying that it
is expected to outperform the broader U.S. equity market over the
next one to three months.
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