SINGAPORE/HONG KONG (Reuters):
CNOOC LTD. is to pay US$2.3 billion for a stake in a Nigerian oil and gas field, marking the latest overseas acquisition by a state-run Chinese major oil company keen to meet surging domestic demand.
CNOOC, China's dominant offshore oil and gas producer, said yesterday it will pay cash from internal resources to buy a 45 per cent working interest in Nigerian Oil Mining Licence (OML) 130 from South Atlantic Petroleum in its largest overseas purchase.
The block, operated by global oil company Total, contains the Akpo deepwater field, which is set to come onstream in the second half of 2008. CNOOC said it will contribute capital expenditure of US$2.25 billion to develop the field.
CNOOC did not say who owns South Atlantic Petroleum, but sources have said is controlled by former Nigerian Defence Minister Theophilus Danjuma.
The field and other assets nearby are estimated by some industry sources to have total recoverable reserves of up to 2 billion barrels in oil and gas.
"It's quite a good deal. We expect there will be upside on share performance. Also, CNOOC is likely to catch up with other oil stocks, which gained on the strong international oil price today," DBS analyst Gideon Lo said.
CNOOC said it is paying US$4.60 per barrel of oil equivalent (BOE) for the main part of its Nigeria acquisition. By comparison, CNOOC rival China National Petroleum Corp. paid about US$7.30/BOE last year for PetroKazakhstan, CNOOC said.
PEAK PRODUCTION
Total said in May that Akpo would come onstream in late 2008 and was forecast to reach peak production of 225,000 barrels of oil equivalent per day.
The field was discovered in 2000, and is 200 kilometres offshore in water depths ranging from 1,100 to 1,700 metres.
Other partners in the field are Nigerian National Petroleum Corp. and Petrobras.
Nigeria is Africa's biggest oil producer and the world's eighth-largest oil exporter, producing 2.4 million barrels per day.
Trading in CNOOC shares was suspended on Monday pending an announcement about an acquisition. The stock finished at HK$5.40 on Friday, having risen nearly 5 per cent in the past three months.
