China’s Sinopec buys Marathon Angola oilfields

CHINA’S Sinopec Group has agreed to buy Marathon Oil’s Angolan offshore oil and gas field for $1.52bn (£985.2m), Asia’s largest refiner producer said over the weekend.

Sonangol Sinopec International, the group’s subsidiary, will acquire Houston-based Marathon’s 10 per cent stake in the Angolan field called Block 31, it said in a statement.

China’s oil majors haver been on an aggressive hunt for overseas assets recently, to bulk up their energy reserves to meet future demand from the world’s second-largest economy.

Back in March CNPC agreed to buy a $4.2bn stake in a Mozambique offshore natural gas field and last Friday also agreed to buy a 20 per cent stake in Russian firm Novatek’s $20bn Yamal-LNG project in northwest Siberia.

The Angolan Block 31 field, operated by BP, has estimated proved and probable reserves of 533m barrels, Sinopec said.

Production at the block in the Plutao field started in February, with initial production from three wells in the field expected to hit 70,000 barrels per day.

The company added that it would hold a stake of 15 per cent in the block when the transaction was completed.

The $1.52bn due to be paid by Sinopec is part of a $3bn asset disposal target set by Marathon in 2011 to shore up its balance sheet to fund further exploration and development projects.

Earlier this month Marathon’s chairman and president Clarence P Cazalot, announced that he will retire at the end of this year after 14 years leading the firm.

He will be succeeded by ExxonMobil alumnus Lee M Tillman at the beginning of August.

Dennis H Reilley, currently Marathon Oil lead director, will become non-executive chairman on Cazalot’s retirement.

The deal is subject to approval by the Chinese and Angolan governments.