A joint venture would be set up between China Petroleum and Chemical Corp and its mother company. Sinopec would purchase US$3 billion worth of oil and gas properties owned by China Petrochemical Group to boost profitability.
The 50/50 partnership would purchase oil and gas assets that have both proven and probable reserves totalling 310 million barrels. In a statement, Sinopec Corp said, "The transaction will boost Sinopec's profitability."
The agreement would boost Sinopec Corp's reserves by 9.1% which is about 3.1 billion barrels of oil equivalents and its production in crude would increase by 11.2% to 365 million barrels.
Sinopec Group has purchased about US$40 billion in assets for the past three years, such as Addax Petroleum Corp at US$7.24 billion in order to become a player in West Africa and Iraq's Kurdistan region. The assets to be purchased for this venture were not disclosed as well as other details of the joint venture partnership.
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