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Sinopec, CNPC Said to Buy Sudan Oil Block

11/15/2005 7:17pm

By Aries Poon
Sinopec, CNPC to Acquire Sudan Oil Block for $600 Million, Report Says

HONG KONG (AP) -- China Petrochemical Corp., or Sinopec Group, plans to partner with its domestic rival China National Petroleum Corp., or CNPC, to acquire drilling rights to an oilfield in Sudan for about US$600 million (euro514 million), Dow Jones Newswires reported Tuesday, citing an individual who did not want to be named.
The two unlisted Chinese oil giants are expected to sign the deal by the end of this year, the report said, quoting an individual close to the deal who declined to be named because of its sensitive nature.

The Sudan government is looking to keep a stake in the oilfield venture, which is expected to produce more than 20,000 barrels of crude oil per day at the initial stage of the development, the person said.

Sinopec Group, which doesn't have any upstream oil assets in oil-rich Sudan, is the unlisted parent of China Petroleum & Chemical Corporation, better known as Sinopec, Asia's largest refiner by capacity.

CNPC, the unlisted parent of China's largest integrated oil producer PetroChina Co., has upstream oil assets in Sudan.

Officials of both companies couldn't be immediately reached for comment.

Sinopec Group exited from U.S.-sanctioned Sudan in 2000 ahead of its unit's global offering in October that year. It sold its entire 80 percent stake in a small exploration block in Sudan to CNPC in June 2000, as human rights groups in the U.S. protested against the company's business ties with Sudan.

CNPC, whose PetroChina unit also listed in 2000, didn't back out despite protests from the human rights groups, who claimed Sudan's Islamist government was using oil revenues to fund its war against rebels in the mainly Christian and animist south.

Aries Poon is a correspondent for Dow Jones Newswires

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