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Sinopec in 'takeover' bid
By Wan Zhihong (China Daily)
Updated: 2008-08-05 08:55
Sinopec, China's largest oil refiner, has launched a bid for the London-listed Imperial Energy as part of its overseas development. Imperial Energy's board has allowed Sinopec to start due diligence, the Sunday Telegraph reported, without revealing the source. Sinopec is understood to have approached the Russian authorities and been given the approval to carry out a potential takeover, said the British newspaper. If Sinopec succeeds in buying the $2.5 billion firm, it would be the biggest takeover by a Chinese company of a rival listed on the London market, said the report. A Sinopec spokesman declined to comment on the report yesterday. Analysts said the move signified that China, the world's second biggest energy consumer, is marching at a fast pace to enter the Russian energy market. The country will enable China to have better access to oil worldwide. Imperial Energy has oil blocks in Russia and Kazakhstan. It produced about 10,000 barrels of oil per day in December 2007 and is aiming to raise the production to 80,000 barrels per day by the end of 2011. Imperial Energy said last month it was in talks regarding a possible offer of 12.90 pounds ($25.29) a share. India's state-controlled Oil and Natural Gas Company (ONGC) may be a potential bidder, said the Sunday Telegraph. Chinese Vice-Premier Wang Qishan said last month that energy cooperation plays an important role in the strategic cooperation between China and Russia. The two nations would achieve more progress in large-scale items concerning crude oil trade, construction of oil and gas pipelines, prospecting and exploitation, refining and chemical industries. Sinopec said in July that its net profit for the first half of the year would decrease by over 50 percent from a year earlier as it saw big losses in its oil refining business. The gap between the high crude price on the international market and the relatively low price of refined oil products domestically has put the company's refining business in the red, the company said in a statement. In the first half of 2007, Sinopec's net profit was 34.93 billion yuan ($5.1 billion). (For more biz stories, please visit Industries)
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