China Petrochemical Corp., known as Sinopec Group, said Friday that one of its joint ventures purchased Marathon Oil Corp.'s entire 10% stake in a deepwater block off Angola for $1.52 billion.
Sinopec's joint venture in Angola, known as Sonangol Sinopec International Ltd., will now have a 15% stake in the asset, known as Angola Block 31, it said. The deal will raise the joint venture's total output to as much 14,600 barrels a day, it added. China Sonangol International Holding Ltd. holds the other 50% in the joint venture.
Sinopec's latest deal is part of its efforts to seek returns abroad--primarily in oil-and-gas exploration and production--as heavily regulated domestic fuel prices have squeezed its profits at home in China. Sinopec's main expertise is in refining and petrochemicals.
Sinopec has said it plans to more than double its share of output from overseas projects to more than 50 million tons of oil equivalent a year by 2015 from 22.88 million TOE in 2011.
Meanwhile, Angola Block 31 has several stakeholders, including subsidiaries of U.K. oil major BP PLC (BP.LN), Angola's Sonangol and Norway's Statoil ASA (STO). The block, which began production in December, is operated by BP and has an estimated 533 million barrels of "2P reserves," an industry term used to describe reserves that have a 50% confidence level of recovery.
BP said in January that one of its projects in Angola Block 31 was expected to produce as much as 70,000 barrels a day of oil. The project's output is expected to rise to as much as 150,000 barrels a day this year, it added.
Copyright (c) 2012 Dow Jones & Company, Inc.
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