China's Sinopec signs $3.1bn Egypt oil deal with Apache
- 30 August 2013
- From the section Business
China Petrochemical Corporation, also known as Sinopec, has agreed to buy a 33% stake in the Egyptian oil and gas business of US firm Apache Corporation.
Sinopec will pay Apache $3.1bn (£2bn) in cash for the stake.
The deal is the latest in a series of similar moves by Chinese oil firms as they look to secure energy supplies to meet growing domestic demand.
China is the world's second-largest consumer of oil, behind the US, and imports are key to meeting its needs.
According to the firm's website, Apache's Egypt operations produced an average of 100,000 barrels of oil and 354 million cubic feet of natural gas per day in 2012.
"Sinopec is an ideal partner for us, and we look forward to the growth and value generation ahead for both companies through the expansion of our collaboration to other projects," Steven Farris, chief executive of Apache, said in a statement.
The company's exploration and production operations, which are located in remote, unpopulated areas, also remain unaffected by political events in the region.
China is the world's second-largest economy. Its rapid growth in recent years has seen a surge in demand for energy sources.
The growing demand has resulted in Chinese firms striking deals across the globe in an attempt to secure long-term supplies.
In June, Sinpoec agreed to pay $1.5bn to US firm Marathon Oil Corporations for a 10% stake in its Angolan oil and gas field. It had bought a 5% stake in the same field from French firm Total in 2011.
Sinopec also agreed a $2.2bn deal with Devon Energy earlier this year, giving it a one-third stake in five new shale projects in the US. The two firms are expecting to drill 125 wells this year.
Meanwhile PetroChina, another big player in the Chinese oil sector, inked a deal to gain further access to Canadian oil and gas reserves.
PetroChina, which already owned a 60% stake in the Mackay River oil sands project, bought the remaining 40% share for $673m.
Late last year, China National Petroleum Corporation won approval for oil exploration and extraction in Afghanistan.