x Abu Dhabi, UAESunday 23 July 2017

Sinopec agrees to record takeover

Sinopec, the Chinese state-owned oil refiner, has agreed to acquire Canada's Addax Petroleum for about C$8 billion.

Sinopec, the Chinese state-owned oil refiner, has agreed to acquire Canada's Addax Petroleum for about C$8 billion (Dh25.63bn) in the largest foreign takeover by a Chinese company. The board of Addax, which produces oil in west Africa and Iraqi Kurdistan, unanimously endorsed the C$52.50 per share offer, which was higher than analysts had expected, Addax has been courted by several Asian suitors, and is understood to have received rival takeover bids from Korean National Oil Company and possibly two Indian firms, the state-controlled Oil and Natural Gas Corporation and Reliance Industries. Jean-Claude Gandur, the chief executive of Addax, said the deal would accelerate the company's oil development and exploration plans.

"We are pleased that Sinopec has recognised the highly attractive asset portfolio and exceptional team that we have assembled," he said in a statement. "We look forward to continuing our business in the countries in which we operate." Recently, Asia's largest energy consumers have been seeking to secure long-term oil and gas supplies they expect to need when their economies rebound. Interest in Addax as a takeover target intensified after the company started exporting oil from northern Iraq's semiautonomous Kurdish region at the beginning this month in a joint venture with Turkey's Genel Enerji and the Kurdistan regional government.

At the end of last year, Addax had 95.7 million barrels of probable oil reserves in Kurdistan, where another Canadian company, Heritage Oil, has recently made a multi-billion barrel discovery. Addax's total proved and probably reserves stood at 536.7 million barrels. In the first quarter of this year, its production averaged 134.7 million barrels per day, mostly from Nigeria. tcarlisle@thenational.ae