Sinopec buys into BP's PSVM

June 26, 2013

Marathon Oil has agreed to sell its 10% working interest in Block 31, off Angola to China Petrochemical Corp. (Sinopec) for US $1.5 billion.. The companies anticipate closing 4Q 2013, with an effective date of January 1, 2013.

The transaction will bring Sinopec’s stake in Block 31 to 15%, including the  5% interest the company purchased from Total in 2011. 

The additional stake in Block 31 will add 14,600 bo/d for Sinopec, the company said in a statement.

"This transaction highlights the shareholder value we have created through exploration success in Angola, as well as our commitment to financial discipline and efforts to profitably grow the company," said Clarence P. Cazalot, Jr., Marathon Oil chairman, president and CEO. "We expect to use the proceeds from this sale to repurchase shares, strengthen the balance sheet and for general corporate purposes." 

Production from the PSVM development on Block 31 commenced 4Q 2012. The holder of Block 31 is Sonangol, Angola's state-owned oil company. The operator is BP Exploration Angola with a 26.67% working interest. Sonangol E.P. holds 25%; Sonangol P&P holds 20%; Statoil Angola A.S. holds 13.33%; and Sinopec currently holds the remaining 5%.

The PSVM development contains four oil fields: Plutão, Saturno, Vénus and Marte, and was discovered in 2002-2004 in water depths of up to 2,000m and is BP’s second-operated development in Angola.The development produces through a converted hull, FPSO with 1.6 million barrels of storage capacity, and it is the first FPSO in Angola ultra-deepwater.

 


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