Sinochem Corp, a state-owned oil product and fertiliser trader with growing operations in upstream oil and gas production and refining, has clinched a US$465 million oilfield acquisition in Yemen. The parent of Hong Kong-listed fertiliser distributor and producer, Sinofert Holdings, yesterday said it had signed an agreement to buy an indirect 16.78 per cent stake in block 10 of the East Shabwa Development area in eastern Yemen, on the southern tip of the Arabian peninsula. The stake was bought in cash from London-based oil firm Soco International, which said it was selling the Yemeni asset to help finance the development of its projects in Vietnam. It is Sinochem's third big overseas acquisition in five years, as it seeks to become an up and downstream integrated oil and gas firm after its monopoly on crude oil trading expired in 1992. The block had net proven reserves of 18.7 million barrels of oil and proved and probable reserves of 29.6 million barrels at the end of 2006, Soco said in a statement. Analysts said the purchase price of about US$24.80 a barrel of proven reserve was not cheap. 'If you compare that with the US$25 market value per barrel of proven reserves of listed CNOOC, it doesn't look cheap, particularly if you consider that listed assets tend to be valued higher as they provide liquidity to shareholders,' said DBS Vickers Securities analyst Gideon Lo Wai-yip. A Sinochem spokesman was not available for comment. The block in East Shabwa had an average output of 40,300 barrels of oil per day in 2006, of which Soco was entitled to 6,766 barrels. In last year's first half, the company was entitled to 6,341 barrels per day. Soco derived US$55 million of pre-tax profit and revenue of US$76 million from the block in 2006. A source close to Sinochem said the Yemeni acquisition would generate synergy with the company's assets in nearby United Arab Emirates and Oman. 'Sinochem will definitely look for more acquisition opportunities in the Middle East, but it is in talks on opportunities globally,' he said. In addition to expanding overseas, Sinochem last year acquired an oil asset in Bohai Bay in northeast China - a 24.5 per cent stake in the offshore Zhaodong oil block that it bought from PetroChina for US$228 million. The block had about 30,000 barrels of daily output in 2005. Despite the acquisitions, Sinochem is still a small player compared with the 457,482 barrels of daily output of CNOOC in 2006. It is the smallest of the nation's three largest state-controlled oil firms. Following the trend Sinochem Corp's overseas acquisition history 2002: Acquired 100 per cent of Atlantis Holding Norway for its oil assets in UAE, Tunisia and Oman 2003: Paid US$100 million to US-based ConocoPhillips for 100 per cent of CRS Resources (Ecuador), which has14 per cent of 16 oilfields in Ecuador 2008: Paid US$465 million to Soco International for a 16.79 per cent stake in block 10 of the East Shabwa development area in Yemen