(Updates with bidding history, additional information about China's interest in Angola).
By Brian Baskin
DOW JONES NEWSWIRES
Marathon Oil Corp. (MRO) agreed to sell a 20% stake in a group
of oil fields off the coast of Angola to Cnooc International Ltd.
(CNOOC) and Sinopec Corp. (SNP), the latest move by China to secure
access to energy resources.
Cnooc and Sinopec, also known as China Petroleum & Chemical,
together are to buy the undivided interest for $1.3 billion.
Marathon, of Houston, will hold onto a remaining 10%.
The sale would mark the completion of a process that began
nearly a year ago when the Chinese companies, both
state-controlled, made an unsuccessful bid for a piece of a license
area, known as Block 32. At the time, Marathon was thought to be
holding out for an offer of $2 billion or more. The recent oil
price crash, which saw futures plunge from $145 a barrel to just
below $35 in February, sparked a reassessment of asset
valuations.
Crude oil, which currently trades around $60 a barrel, has
stabilized in recent weeks, reviving dealmaking appetites.
Chinese oil companies have mounted a global effort to acquire
reserves to feed rapid growth in domestic demand and to replace
declining production at home. China National Petroleum Corp.
partnered with BP PLC (BP) to earlier this month win the right to
develop Iraq's giant Rumaila oil field, and Cnooc is preparing to
bid on the Jubilee field offshore Ghana.
Angola, China's biggest foreign supplier of crude for much of
2008, was the recipient of a $1 billion loan from the Chinese
government earlier this year. The country, which competes with
Nigeria for the title of Africa's largest oil producer, was also
the site of an early overseas oil field acquisition by Sinopec in
2006.
Marathon, which also has refinery operations, is more than a
year into its plan to divest between $2 billion and $4 billion of
assets. The company had previously announced 12 successful
exploration wells in Block 32, which hasn't yet begun commercial
oil production. The remaining interests are held by operator Total
SA (TOT), Angola state-owned oil company Sonangol, Exxon Mobil
Corp. (XOM) and Galp Energia SA (GALP.LB). These partners have
rights of first refusal over the stake.
The deal is expected to close by year-end and requires
government and regulatory approvals.
-By Brian Baskin, Dow Jones Newswires; 212-416-2453;
brian.baskin@dowjones.com
(Tess Stynes in New York contributed to this article)
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