Sinopec Signs SPA on OML138 Usan Field with Total

Sinopec International Petroleum Exploration & Production Corporation, a wholly-owned subsidiary of China Petrochemical Corporation ("Sinopec"), and French Total S.A. ("Total") announced that they have signed a Sale and Purchase Agreement ("SPA") on the block OML138, with an agreed contract price of around USD 2.46 billion (subject to post-closing adjustments). Under the SPA, Sinopec will acquire all the 20% stakes of Total on the block. The deal is subject to relevant regulatory approvals.

The OML 138 block contains the Usan field and is located in the Niger Delta basin, offshore West Africa, with water depths ranging from 500m to 1,000m. Operated by Total, the block area is 906 km2. Currently, Total owns a 20% stake of the block and assumes the role of operator. After the purchase, Sinopec will have around 100 million barrels of recoverable resources, as per its share of interest. The field was put into production in late February, 2012, and has enjoyed steady operation and production. Its current equity oil output is approximately 24,000 barrels per day and it is expected to turn out 26,000 barrels per day net to Sinopec at its highest production level (about 1.3 million tons per year).

Sinopec has been committed to building a mutually beneficial relationship with international peers while expanding business overseas. Sinopec is pleased to enter into an agreement with Total. This gives the Group a chance to participate in the development of the oil industry in Nigeria, and provide the region with crude oil.

This transaction will add a sizable asset to Sinopec's portfolio and provide the company with another opportunity to acquire and develop experience and expertise in deep-water exploration and production. It will also add to Sinopec's reserve and production in the 12th Five Year Plan Period.

(4-traders.com, Edited by Topco)