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CNOOC and Sinopec to buy Angolan oil field stake
Published on: 2009-07-20
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CNOOC and Sinopec have agreed to buy a 20 per cent stake in an oilfield off the coast of Angola for $1.3bn from Marathon of the US, as China continues to pursue its efforts to buy up energy and mining assets overseas.

The Chinese energy companies said they would form a 50-50 venture to buy the stake in an area known as block 32, which has so far yielded 12 discoveries.

Marathon will retain a 10 per cent working interest in the block.

Chinese companies have a chequered record with regard to the purchase of overseas energy and mining assets. They have been quietly buying up sources of commodities that will be needed to fuel China's economic growth.

Sinopec recently moved into the booming oil frontier of Iraqi Kurdistan by agreeing a C$8.3bn (US$7.2bn) takeover of Addax Petroleum , an independent oil company based in Canada.

This month, China Investment Corporation, the $200bn sovereign wealth fund, agreed to pay C$1.74bn for a 17.2 per cent stake in Teck Resources , a Canadian zinc and copper miner.

However, the country's pursuit of resources was dealt a blow when Rio Tinto, the Anglo-Australian mining company, rejected Chinalco's $19.5bn bid for part of the company.

That deal, which floundered for market reasons, faced economic, political and shareholder opposition, reflecting fears over giving China direct access to large supplies of natural resources.

Such concern has increased since Beijing detained four employees of Rio , including one Australian citizen, in connection with global iron ore contract pricing negotiations.

The deal in Angola, which is a major supplier of crude to China, prices the African assets more cheaply than Marathon had originally hoped. Marathon had tried to sell the stake for up to $2bn, sources close to the deal said at the time.

Other partners in block 32 - Total of France with a 30 per cent stake; Sonangol, the Angola state-owned company, with 20 per cent; ExxonMobil with 15 per cent and Galp of Portugal with 5 per cent - have rights of first refusal.

Any of those companies could buy the 20 per cent stake at the price being offered by the Chinese.

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