Sinopec Group Execs In London For Addax Talks-Sources
UPDATE: Sinopec Grp Execs In London For Addax Talks-Sources
Last Update: 6/17/2009 7:19:16 AM
LONDON (Dow Jones)--Executives from Chinese oil company Sinopec Group are in
London to meet with Addax Petroleum Corp. (AXC.T) to discuss a potential takeover
bid, two people familiar with the matter told Dow Jones Newswires Wednesday.
Addax's Chief Executive Jean Claude Gandur is open to a deal, but "if (Sinopec)
wants to be successful, they have to put a serious amount of money on the table
to discourage other competitors," said the first person. An offer in the $7
billion to $8 billion range is likely, the person said.
Several press reports have said Sinopec has offered GBP4.8 billion ($7.8 billion)
for Addax.
Korean National Oil Co., or KNOC, has also made a bid approach to Addax, a person
familiar with the matter told the Wall Street Journal Sunday.
Addax has large stakes in several highly prospective oil exploration blocks
offshore West Africa and is operator of the large Taq Taq oil field in Iraqi
Kurdistan. Taq Taq produces 40,000 barrels a day, though peak production is
envisaged at 180,000 barrels a day. Since June 1, Addax has been able to truck
Taq Taq's oil to the Iraq-Turkey pipeline, which pumps it to the Mediterranean
port of Ceyhan.
Political sensitivities over the Chinese becoming operators of significant oil
fields in Iraq and Nigeria could prove an obstacle to completion of the deal,
said the first person. The key is whether, "the Chinese have ticked all the
political boxes...and can Addax lock in key people to make sure operations are
properly managed going forward," the person said.
If Sinopec doesn't close the deal several other companies are waiting in the
wings, the person said.
Sinopec Group is the parent company of China Petroleum & Chemical Corp. (SNP).
Company Web site: www.addaxpetroleum.com
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317;
james.herron@dowjones.com (Amy Or in Shanghai contributed to this story)
(END) Dow Jones Newswires
June 17, 2009 07:19 ET (11:19 GMT)
