On October 1, 2010, Sinopec Group International Petroleum Exploration & Development Co., Ltd. ("International Exploration Company") reached a confirmation agreement with Repsol Brazil, and its wholly-owned subsidiary will subscribe for new shares of Repsol Brazil, after the subscription. The proportion of shares is 40% (based on the complete dilution of existing shares). The value of this transaction was a total of 7.109 billion U.S. dollars, which was adjusted as necessary. The value of the joint venture company was US$ 17.773 billion.
International Exploration Company is a wholly-owned subsidiary of China Petroleum & Chemical Corporation (“Sinopec Groupâ€) and is responsible for the overseas investment and operation of upstream oil and gas assets. Sinopec Group is China's largest producer and supplier of petroleum and major chemical products.
This transaction needs to be approved by the Chinese government, but there is no ** condition.
Sinopec Group believes this transaction will be more conducive to achieving its strategic goal of participating more in oil and gas operations in South America, accelerating its international development, and optimizing its offshore oil and gas asset portfolio.
The subscription agreement stipulates that both parties will jointly develop existing assets in Brazil, and at the same time allow both parties to jointly or independently participate in new block bids in the future. Repsol Brazil is currently participating in several major exploration basins in Brazil: Santos, Campos and Espirito Santo.
Scotia Waterous and Vinson & Elkins LLP acted as advisors to the Chinese on this transaction.
Background information:
Repsol was founded in September 1987 and is the largest industrial company in Spain. Its business operations include exploration and production, refining and sales, chemicals, and natural gas.
In January 1999, Repsol purchased 14.99% of YPF, and obtained approximately 20% of YPF's capital. In April 1999, Repsol also purchased YPF’s remaining shares and ADS in cash through open tender. On June 23, 1999, Repsol further acquired the remaining 82.5% of YPF. Capital equities, which led Repsol to control 97.5% of YPF's capital interest, completed the acquisition of YPF. Repsol-YPF is principally engaged in the exploration and production of petroleum and natural gas, refining, sales, and production and sales of chemical products and natural gas. In addition, the company also engages in certain power generation businesses.
Repsol’s oil and gas net proven reserves are 978 million barrels (134 million tons) of oil equivalent, of which 66% are petroleum (about 0.88 million tons) and 34% are natural gas (56.5 billion cubic meters). The total oil and gas production in 1998 was 90.55 million barrels (about 12.4 million tons) of oil equivalent, of which 74.44 million barrels of oil (10.18 million tons) and 97.3 billion cubic feet of natural gas (about 2.8 billion cubic meters); The petroleum processing volume was 41.83 million tons, and the oil sales volume was 39.58 million tons.
According to the six general indicators of international oil reserves, oil production, natural gas reserves, natural gas production, refining capacity, and oil sales, Repsol Oil Company ranks 47th among the world's oil companies.
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Sinopec Advances $7.1 Billion into Brazil Oilfield Exploration Project
Spain’s largest oil company Repsol announced on Friday that Sinopec Group will purchase 40% of its Brazilian subsidiary for US$7.1 billion to fund its exploration projects in Guara and Carioca oilfields in Brazil. . Foreign Power quoted Repsol, said the company's assets in Brazil is about 10.7 billion US dollars, after the completion of the transaction, its subsidiary in Brazil will become one of the largest private energy companies in Latin America. Repsol still holds a 60% stake in the joint venture.
This will be another large-scale overseas energy investment case after Sinopec bought Addax Petroleum Corp. for $8.3 billion (about $8 billion) last year and obtained Iraq and West Africa crude oil deposits.
The transaction will be achieved through the expansion of capital. Through this transaction, Repsol will receive the funds required for the development of oil projects in Brazil. Repsol Oil will issue new shares for the Brazilian business, and the new share purchaser will be China Petroleum & Chemical Corporation. After completion of the transaction, the market value of Repsol’s Brazilian business unit will reach US$17.8 billion.
Repsol said, “With support from Sinopec, the Repsol Brazil branch will have sufficient funds to develop all of its existing projects in Brazil, including the world-class Guara and Carioca fields. Both companies will continue their respective expansion plans in Brazil. , and will jointly or separately participate in bidding for the Brazilian oil project."
According to statistics from 2009, Repsol is the third-largest oil supplier in Brazil and the largest foreign-invested company with oil exploration blocks in Brazil. Repsol stated in a statement on Friday that "The agreement between Repsol and Sinopec will help the two companies reach a comprehensive cooperation in the development of existing projects. At the same time, the two companies can also develop other Brazilian oil projects in a joint venture or independent operation. ."
Repsol added that the company and Sinopec will continue their respective expansion plans in Brazil, and will jointly or separately participate in bidding activities in the region. The company currently holds stakes in such reservoirs as Santos, Campos and Espirito in Brazil, and stated that it will invest up to 5 billion U.S. dollars from 2010 to 2014 and will invest up to 9 billion U.S. dollars in these projects from 2015 to 2019.