Sinopec buys Kazakh oil assets

Oct 22, 2004 02:00 AM

China's Sinopec has bought over $ 160 mm worth of oil assets in Kazakhstan from a US firm and re-entered Sudan by taking a small oil stake, adding to the state refiner's growing foreign portfolio, sources said. Sinopec Group acquired First International Oil Company, which has petroleum operations in the central Asian country, including five oil exploration blocks and one small producing field, the industry sources said.
"It's Sinopec's first takeover of an oil firm but a small one, with small production," a Sinopec official close to the deal said, adding that the assets are located in the onshore areas around the Caspian basin. The producing oilfield pumps 200 000 tpy, or 4 000 bpd, sources said.

Sinopec Group, parent of New York and Hong Kong-listed Sinopec has also returned to oil-rich Sudan, which is reeling from a two-decade political conflict that the United Nations said had caused one of the worst humanitarian crises. Sinopec bought from a regional oil company a total of 6 %-stake in oil block 3 and block 7 in Sudan, both due to start production next year.
Sinopec, whose oil workers drilled wells in Sudan in the 1990s, backed out before its public listing in 2000 from the north African country, which was then under US sanctions, worried that international investors would dump its shares. The UN Security Council early shied away from endorsing a US-drafted resolution to impose oil sanctions against Sudan for atrocities against civilians, which China had threatened to veto.

Cash-rich state oil firms are hard pressed to hunt for oil and gas reserves overseas as China is importing 43 % of its crude oil needs, up from last year's 38 %, to meet robust oil demand. This pressure is particularly great for Sinopec, as it imports more than three quarters of its crude needs and accounts for more than 80 % of China's total crude oil imports now running at a record of 2,5 mm bpd.
But compared to domestic rivals China National Petroleum Corporation and Sinochem, Sinopec has been slow in making acquisitions. Top of its shopping list is a 42,630-sq-km gas block in Saudi Arabia, where Sinopec is expected to explore and produce natural gas in a 80:20 joint-venture with state-owned Saudi Aramco.

Source: Engineering News
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