Sinopec buys Nigerian oil stake for US$2.5 billion

PUBLISHED : Tuesday, 20 November, 2012, 12:00am
UPDATED : Tuesday, 20 November, 2012, 3:51am

Total, France's largest oil company, has sold its 20 per cent stake in an offshore Nigerian field to China Petrochemical Corp (Sinopec) for about US$2.5 billion as part of an asset-disposal programme.

The OML 138 block includes the Usan field, which started output in February, Total said yesterday. The asset accounts for about 10 per cent of Total's Nigerian production, which averaged 287,000 barrels a day last year.

The sale is part of Total's plans to complete US$15 billion to US$20 billion of asset disposals from 2012 to 2014. China's state-backed energy companies are seeking new oil and gas reserves abroad, especially from regions like Africa where government scrutiny is lighter than in North America or Europe.

The sale of a minority stake in the Nigerian block is in line with Total's policy of actively managing its portfolio, Yves-Louis Darricarrere, head of exploration and production, said yesterday.

The Usan field production, whose ramp-up was slower than expected, could reach 140,000 barrels a day by the end of the year, chief financial officer Patrick de la Chevardiere said in July. The French company had said it was expecting a peak rate of 180,000 barrels a day.

Total rose as much as 2 per cent and was trading 70 cents higher at €37.67 yesterday.

Total is also searching for a buyer for its southwestern French natural gas network known as TIGF. Current disposals could bring Total about halfway to its target, de la Chevardiere said last month.

Beijing-based Sinopec has also approached the French oil firm Etablissements Maurel et Prom, which operates in Gabon, about an acquisition, people familiar with the matter said this month.

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 2011 levels. Its parent, China Petrochemical, said in January that it will seek to produce 50 million metric tonnes of crude a year overseas by 2015. Last year, foreign production was 23 million tonnes.

The Nigerian National Petroleum Corp is the OML 138 concession holder. Chevron Petroleum Nigeria has 30 per cent, as does Esso E&P Nigeria. Nexen Petroleum Nigeria has 20 per cent.