Sinopec close to deal for Nigerian oilfields

Mainland oil giant seeking acquisitions to boost its falling crude reserves, say industry sources

PUBLISHED : Wednesday, 07 November, 2012, 12:00am
UPDATED : Wednesday, 07 November, 2012, 3:36am

China Petroleum & Chemical Corp (Sinopec) is close to buying stakes in Nigerian onshore oil blocks from Total for about US$2.4 billion as it seeks to reverse a decline in oil reserves, industry sources say.

The French explorer, the third-biggest oil company in Europe, is seeking to divest up to US$20 billion of assets before 2014 to raise cash for oil and gas projects.

Chief executive Christophe de Margerie has said most of that would come from the exploration and production division.

Chinese energy companies are seeking new oil and gas reserves abroad to feed the economy, especially in regions such as Africa.

A Total official in Paris declined to comment on the sale report. A spokesman for Sinopec was not available for comment.

Nigeria was tied with Norway last year as Total's biggest source of hydrocarbons, accounting for 287,000 barrels of oil equivalent a day, or about 12 per cent of the total.

The company plans to pump 3 million barrels a day of oil and gas in 2017.

Total's asset sale target, announced during an annual investor conference in London last month, compares with US$15 billion of "finalised" sales in the past two years, according to figures given in February. A portion of these came from the divestment of shares in French drugmaker Sanofi.

Total has quickened the pace of deals in recent years as part of a policy to "actively manage" its portfolio of exploration acreage, refineries and pipelines around the world.

The Paris-based company agreed last year to sell its stake in the Norwegian Gassled pipeline system, while de Margerie has said he was studying a sale of the TIGF network in southern France.

Total also sold a stake in a Spanish oil refiner and tried to sell the Lindsey refinery in Britain.

Sinopec's reserves of crude oil declined from 3.3 billion barrels in 2007 to 2.8 billion barrels at the end of last year, enough for nine years of production at last year's levels.

Its parent, China Petrochemical, said in January that it aimed to produce 50 million tonnes of crude a year overseas by 2015. Last year, foreign production was 23 million tonnes.