Sinopec Group has agreed to pay US$3.1 billion for a 33.3 percent stake in American company Apache Corp’s Egypt oil and gas business, as the Chinese company continues to source resources abroad.
The deal, which will be Sinopec’s biggest in the Middle East, is the first step in a new broader strategic partnership between the two firms to pursue joint upstream oil and gas projects globally, Houston-based Apache said in a statement.
“Their technical expertise complements our 20 years of experience operating in Egypt and creates an alliance that will continue to explore and deliver the tremendous hydrocarbon resources in the Western Desert,” G. Steven Farris, chairman and chief executive officer of Apache, said of Sinopec.
Sinopec said yesterday that the purchase will be its first foray into Egypt’s upstream oil and gas market.
The deal will add up to 130,000 barrels of oil equivalent per day, or 6.5 million tons per year, to Sinopec’s production, the company said. Last year, Sinopec said it aims to raise overseas production to 50 million tons per year by 2015.
A spokesman for Sinopec International Petroleum Exploration and Production Corp, said it is aware of the current political unrest in the Middle East and the company has long-term goals.
Sinopec Group usually buys overseas assets through Sinopec International, and selectively injects some of the assets into its listed unit, Sinopec Corp.
The latest deal is subject to Egyptian government approvals and is expected to close in the fourth quarter, Apache said.