China's Yanchang Petroleum to explore in Madagascar

China's Shaanxi Yanchang Petroleum Group has bought 15 % of a Hong Kong-listed firm that operates oil blocks in Madagascar, marking one of the few non-major Chinese oil firms venturing into overseas hydrocarbon assets.
Shaanxi Yanchang, an oil producer and refiner backed by the Shaanxi provincial government, struck the deal with Sino Union Energy Investment Corp, the latter said.

The deal will allow Yanchang Petroleum to tap two oil blocks -- Block 3113 and Block 2104 -- in Madagascar owned by Sino Union. Yanchang Petroleum, together with Sino Union and Hong Kong and China Gas Co, planned to set up a joint venture in Madagascar to develop and operate the oil fields, it said.
Block 2104 has estimated oil reserves of some 3.6 bn barrels and natural gas of 66.24 bn cm, while Block 3113 is estimated to hold oil reserves of no less than 2 bn barrels, according to an international evaluation agency.

Sino Union won 30 years of oil production rights and 35 years of natural gas production on Blocks 3113 and 2104 in 2007.
Yanchang Petroleum is one of China's few sizeable regional oil firms outside state energy giants Sinopec and PetroChina. In 2009, the firm, in northern Shaanxi province, produced 224,000 bpd of crude and processed almost all of them at its own refinery.