Sinopec to buy 40% of Repsol Brazil for US$ 7.1 billion, Focus Reports
Release Date: 2010-10-07
China’s second-largest oil company, Sinopec Group, announced that they would invest US$7.1 billion to acquire a 40% minority stake in Repsol Brazil.Madrid-based Repsol has welcomed the move as a strategic means to raise capital needed for the exploration of its offshore oil reserves in the states of Rio de Janeiro and São Paulo. The company had originally considered launching an initial public offering to raise the necessary capital. Pending approval, the deal will create one of the region’s largest privately-owned energy companies valued at US$ 17.8 billion.
Sinopec is also exploring the possibility of a US$7 billion bid for assets in OGX, Brazil’s largest independent oil exploration company, which boasts 29 exploration sites throughout the country. The Chinese group has been on a buying spree in recent years, granting it access to promising markets around the world that will secure the energy demands of the booming Chinese economy. Last year they purchased Switzerland’s Addax Petroleum for US$ 8 billion in order to establish its presence in West Africa and Iraq.
Brazil's oil market has become one of the world’s most relevant since the discovery of large reservoirs under the pre-salt layer of the earth’s crust, which could possibly turn the country into a major global petroleum exporter. Most telling of the potential of the Brazilian market was Petrobras’ astonishing share sale last week, which raised close to US$ 70 billion.
Both Repsol and Sinopec saw an increase in their shares after the deal had been announced, indicating investors’ conviction of the success of the partnership. Repsol’s shares hit a 2-year high of 20 euros.
| Type: | NORMAL |
| Company: | Focus Reports |
| Country: | Switzerland |