Eni Signs Memorandum Of Understanding With Sinopec

ROME (Dow Jones Newswires), July 22, 2011

Eni confirmed it signed a memorandum of understanding with China Petroleum & Chemical Corp., or Sinopec, as Italy's biggest oil and natural gas company strengthens its ties with Chinese hydrocarbon firms.

Eni confirmed an earlier report from Italian newswire ANSA on the accord.

Eni is particularly interested in the development of shale gas in China, said Chief Executive Paolo Scaroni, according to ANSA.

The deal "signed today allows us to analyze together a series of opportunities in China and outside China," said Scaroni, according to ANSA. "I believe that if shale gas is found in China, its development will be strong."

ANSA wrote details of the deal will be announced in the coming days.

Once the companies move from assessing the situation to an operational phase in China, Eni will sign deals in which it become the owner of gas produced, said Scaroni, wrote ANSA.

Chinese companies are interested in expanding abroad through deals with Eni, especially in Africa, said Scaroni, according to ANSA.

Eni and Sinopec are no strangers as they have some joint deals, such as Angola's 15/06 block.

Eni, which entered the Chinese market in 1984, is a small player is the world's number two economy with a daily output of 12,000 barrels of oil equivalent, according to figures released earlier this year.

The Italian company is seeking to tap into China's gas market, which is still in its infancy when compared with coal. At the start of the year, Eni signed a deal with China National Petroleum Corp., or CNPC, as part of this strategy.

Copyright (c) 2011 Dow Jones & Company, Inc.

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