China National Petroleum Corp (CNPC) has agreed to purchase $2.6 billion in Peruvian gas assets from Brazil’s debt-strapped state-run oil company Petrobras as China works fast to increase its Latin America footprint.
CNPC, China’s top oil and gas firm, will buy Petrobras Energia Peru SA, which owns three oil and gas blocks in Peru, currently producing around 800,000 tons of oil equivalent a year. Completion of the acquisition is subject to approval by the Chinese and Peruvian governments.
“The acquisition of the assets will help to expand the scale of PetroChina’s oil and gas cooperation in Latin America and drive the sustainable development of PetroChina’s overseas business,” CNPC said in a press release.
China is increasing its overseas acquisitions to meet rapidly growing energy needs, while its own mature plays are producing stagnant output. PetroChina is eyeing half of its total production from overseas by 2015.
On 21 October, a consortium led by Anglo-Dutch oil major Shell, France’s Total and PetroChina and its sister company Cnooc, won the bid for Brazil’s Libra deep-water oilfield in a landmark auction.
Shell and Total will each have a 20% stake in Libra, with the two Chinese companies holding a 10% stake each and the rest held by Petrobras.
On other side of this coin, Petrobras, the most indebtedpublicly traded oil company, has been looking to sell its foreign assets to focus on tapping massive deposits discovered off Brazil’s Atlantic coast.
Petrobras plans to invest $237 billion through 2017, focusing largely on pre-salt, ultra-deep-water oil reservoirs. The sale of its Peruvian assets is part of a $9.9 billion divestment plan that will include the sell-off of stakes in the Gulf of Mexico and Africa, among other venues.
In September, Petrobras sold its oil concessions and pipelines in Colombia to Perenco UK Ltd for $380 million.
This piece is cross-posted from OilPrice.com with permission.