Sinopec Makes A Small Bid For Addax Petroleum

What intrigues this Bystander about reports that Sinopec is in talks to buy Addax Petroleum, a small oil exploration company, is not that Addax has oil fields in West Africa, but that it has them in the Kurdish part of Iraq. Baghdad has recently changed the rules on oil exports from that region; foreign companies are no longer restricted to selling locally, but can export directly.

Sinopec is not alone in looking for acquisitions there. In the particular case of Addax, Korean National Oil is a potential rival bidder.

Addax is developing the Taq Taq field about 85 kilometers southeast of Erbil. Output is currently 40,000 barrels a day, now exported through Turkey. Potentially the field could produce more than four times that volume.

Addax, which is based in Switzerland but listed on the London and Toronto exchanges, has a market value of $6.25 billion. Sinopec is reported to be bidding $7.9 billion, still small enough to avoid the sort of high-profile controversy that tripped up Chinalco over Rio-Tinto.

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One response to “Sinopec Makes A Small Bid For Addax Petroleum

  1. Pingback: Sinopec Buys Oil Reserves in Nigeria | China Bystander

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