HONG KONG - China Petrochemical Corp.'s listed arm is in talks to buy assets owned by its state-owned parent worth $8 billion, two people familiar with the matter said Wednesday, giving the oil refiner a bigger footprint in oil and gas production and exploration globally.
China Petroleum & Chemical Corp., or Sinopec, which is listed in Hong Kong and Shanghai, is planning to buy its parent's upstream assets in countries such as U.K., Russia, Colombia, and Kazakhstan. The acquisition will take place in April and is aimed at putting Sinopec on par with other international oil majors like Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC, whose operations globally span refining, exploration and production of oil and gas.
The acquisition is being led by Sinopec Chairman Fu Chengyu, who led a failed bid for U.S. oil company Unocal in 2005 when he was at the helm of Cnooc Ltd., China's largest offshore oil and gas producer by capacity. In October, a $2.15 billion plan by Sinopec, together with Chinese gas pipeline operator ENN Energy Holdings Ltd. to buy ENN rival China Gas Holdings Ltd. also fell apart after failing to obtain regulatory approval.
Since 2010, Sinopec Group, which holds a 76.28% stake in its Hong Kong and Shanghai listed unit, has invested $34 billion in oil and gas deals in the UK, U.S., Canada, Brazil, Argentina and Australia, according to data provider Dealogic.
Sinopec has already started the process of taking over its parent's overseas assets. In 2010, it acquired a 50% interest in Angola's Block 18, a deep-water-oil asset, from its parent for $2.46 billion.
Copyright (c) 2012 Dow Jones & Company, Inc.
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