PetroChina (中石油), the listed unit of China’s biggest oil and gas producer, said yesterday it had agreed to buy a stake in refiner Singapore Petroleum Co (新加坡石油) for US$1.02 billion.
PetroChina purchased 45.51 percent of the Singaporean company’s issued share capital at a premium on the market price of 24 percent, the Chinese company said in a statement to the Hong Kong Stock Exchange.
The statement also said PetroChina intended to make an offer for the rest of the company upon completion of the deal.
“SPC will become a new platform for the implementation of our international strategy and will provide a broader foundation and stable path for development,” PetroChina said in a statement on its Web site.
RESOURCES
The deal is the latest high-profile bid by China to ensure resources for its fast-growing and energy-guzzling economy.
PetroChina bought the shares from Keppel Oil and Gas Services, part of Singapore-based conglomerate Keppel Corp (吉寶企業), PetroChina’s statement to the Hong Kong Stock Exchange said.
Singapore Petroleum Co is a regional energy company with interests in petroleum refining and marketing and owns a 50 percent stake in Singapore Refining Co, one of Singapore’s three major petroleum refiners, PetroChina said.
EXPLORATION
The Chinese firm said Singapore Petroleum Co is engaged in oil and gas exploration, with production facilities in China, Indonesia, Vietnam, Cambodia and Australia.
“PetroChina has been strong in the upstream business while weaker than [Asia’s top refiner] Sinopec in refining and sales in the country,” said Wang Jing (王晶), an analyst with Orient Securities (東方證券).
“So the takeover will probably strengthen PetroChina’s competitiveness in the middle and downstream businesses,” she said.
She added the geographic location of the target company was of great importance for PetroChina.
“For PetroChina’s business deployment, Singapore has a very important position in Asia’s oil product market,” she said.
“It is a large oil products distributing centre and it has an oil product exchange, which is significant in terms of the pricing power,” Wang said.
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