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Sinopec Corp denies Addax Petroleum bid
(China Daily/Agencies)
Updated: 2009-06-16 08:08

China's largest refiner Sinopec Corp hasn't made a bid for Geneva-based oil producer Addax Petroleum Corp, a company spokesman said yesterday.

But Huang Wensheng, spokesman of Sinopec Corp, said he "isn't clear" if the company's State-owned parent Sinopec Group is making a bid.

The UK's Sunday Times reported earlier that Sinopec bid 4.8 billion pounds ($7.9 billion) for Addax Petroleum. This exceeded an earlier bid by Korean National Oil Corp, the newspaper said without divulging where it got the information.

Domestic media also reported earlier that the Beijing-based Sinopec was in preliminary talks with Addax for the deal. It could be worth as much as $8 billion, they said.

Xu Dongmei, manager of overseas cooperation projects for Sinopec Group, said she has no knowledge of the bid and her department isn't in charge of making the offer.

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Sinopec fell 3.06 percent to HK$5.7 in Hong Kong yesterday. Shares of Asia's biggest refiner have declined 20 percent in the past year, compared with an 18 percent drop in the benchmark Hang Seng Index.

China, which relies on imports for about half of its crude oil needs, is seeking to increase investment in overseas petroleum fields as the oil price plunge of 51 percent from a July record makes it cheaper to acquire overseas energy assets.

Addax has operations in West Africa and holds exploration licenses in Iraq's Kurdistan, which has begun exporting oil.

Addax said on June 9 that preliminary talks were under way with third parties expressing an interest in a "potential transaction" with the company. It didn't elaborate. Addax said on June 1 it has started crude-oil exports from the Taq Taq license area in the autonomous Kurdish region in northern Iraq.

Addax, which is listed on the Toronto Stock Exchange, has a capitalization of C$6.89 billion ($6.15 billion).

Sinopec is now in talks with "several overseas companies for deals", one company source told China Daily yesterday, declining to be named.

In the face of relatively low crude oil prices, China's oil companies have quickened their pace in overseas development. The country's largest oil company PetroChina earlier announced it would acquire 45.5 percent of Singapore Petroleum Co (SPC) from Keppel Corp for S$6.25 ($4.25) a share.

The deal is still subject to Chinese regulatory approval. SPC jointly owns the third largest oil refiner in Singapore, which has a capacity of 285,000 barrels per day.

Sinopec President Wang Tianpu earlier said the company was in talks to buy liquefied natural gas (LNG) from Exxon Mobil Corp's project in Papua New Guinea.

The company plans to buy 2 million tons of the fuel a year from the project, he said.

Sinopec has yet to sign a final agreement with Exxon Mobil and the accord will require government approval, said Wang.

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