Sinopec buys $7.3 billion Addax

China Daily Online news: China Petrochemical Group yesterday agreed with the ADDAX Oil company headquartered in Switzerland to buy the latter at about 7.3 billion dollars, the Chinese daily reported June 25. Sinopec's subsidiary Sinopec International Petroleum Exploration and Development Co., Ltd. has reached an agreement with Addax to buy the latter by $52.8 a share of $45, according to China Daily.　　The move would expand its operations in West Africa and Iraq and further optimize its offshore oil and gas assets, the company said.　　The company also said that Addax's advantage in offshore deepwater oil exploration would bring further business growth to Sinopec. The Addax company, headquartered in Geneva, Switzerland, is listed in Canada and the UK.　　Data show that by the end of last year, the company has proven recoverable oil resources of 536 million barrels, the average daily production of 140,000 barrels. Addax's oil and gas assets are mainly distributed in West and Middle East, including Nigeria, Iraq and so on.　　On average, the company produces 134,000 barrels of oil a day.　　According to the industry, the price premium of 52.8 Canadian dollars for Sinopec is about 47% per cent, but it is still reasonable, despite the Addax's closing price on June 5, which it said was the day before the deal with the relevant partners.　　Experts point out that with the fall in international crude oil prices since the four quarter of last year, many oil and gas assets have shrunk a lot, so Sinopec's acquisition price is acceptable. Industry insiders also pointed out that Sinopec as Asia's largest refining company, the acquisition shows that the company is also planning to further expand its upstream assets, that is, oil and gas exploration and development. (China Daily reporter Wan Zhi Hong Editor Zhang Feng)