China Petroleum & Chemical Corporation SNP , also known as Sinopec, intends to lower exposure in African oil operations, per Reuters. The energy giant has decided to divest its resources in Nigeria and Gabon.
According to the report, Sinopec has employed French financial services giant, BNP Paribas, to seek advice pertaining to the sale.
During 2009, Sinopec disbursed as much as $7.24 billion for the acquisition of upstream energy player Addax Petroleum. With the buyout, Sinopec secured resources in the prospective oil and gas plays of Nigeria, Gabon, Cameroon and Iraq.
From 2009 to 2013, to meet long-term Chinese fuel demand, many energy players in the country were looking for overseas properties to boost oil and gas reserves. But, with the journey of oil in the bearish territory after mid-2014, operations in those assets were not profitable. Moreover, recent militant attack in the Nigerian upstream resources affected Sinopec's businesses.
Per the sources, Sinopec has been showing interest to divest properties of Addax Petroleum which are located both on and off the coast of Nigeria and Gabon. With the completion of the sale, the Cameroon project is expected to be the only African development left for Sinopec.
Investors should know that although oil price has recovered from multi-year lows, the crude properties in Nigeria and Gabon could not fetch more than $1 billion, per the report.
Headquartered in Beijing, Sinopec sports a Zacks Rank #1 (Strong Buy). Although the stock, belonging to the Emerging Markets Integrated
industry, fell 1.7% year to date, we expect the firm to grow 59.1% year over year in 2017.
Other prospective players in the energy sector include BP Plc BP , Northern Oil and Gas, Inc. NOG and ExxonMobil Corp. XOM . Both BP and Northern Oil sport a Zacks Rank #1, while ExxonMobil carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
BP is a leading integrated energy company. The company will likely witness year-over-year earnings growth of 116.5% in 2017.
Based in Minnetonka, MN, Northern Oil is an upstream energy player. The company's revenues are estimated to grow almost 44% in 2017.
Headquartered in Irving, TX, ExxonMobil is the largest publicly traded energy firm. The company managed to beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 8.81%.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report China Petroleum & Chemical Corporation (SNP): Free Stock Analysis Report BP p.l.c. (BP): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research