It was the subsidiary company of Sinopec Group, Sinopec International Petroleum Exploration and Production Corp (SIPC), that settled the deal. On June 24th, Sinopec in Beijing claimed that they would pay C$52.80 ($45) per share to buy the corporation, in cash.

They declared that buying this company will help SIPC to reach its goal of thriving in the market of West Africa and Iraq, enhancing its business in the whole world and making its offshore oil and gas assets portfolio more flexible. Besides, Addax Petroleum has great exploration potential, which will contribute to SIPC’s promising future, especially its offshore deepwater exploration projects.

Though Addax is based in Geneva, its shares are sold in Toronto and London. At the end of 2008, this company had 536 million barrels of oil reserves, including the present and the estimated ones, with the mean production of about 140,000 barrels of oil everyday, which means the annual production is 7 millions tons.  

Most of Addax’s oil and gas assets are located in West Africa and the Middle East, and the most important ones are in Nigeria. From January to March, as the company said, it produced 134,730 barrels of oil per day. At least 75% of its production was from the assets in Nigeria.

Before the day Addax declared that it was taken over by Sinopec, the price of C$52.80 per share is at a 47 percent premium to Addax’s closing share price on June 5. Experts said that Sinopec’s purchase was “wise”, because the oil and gas assets had been reducing in value, due to the worldwide economic recession.

According to Lin Baoqiang, director of the China Center for Energy Economics Research of Xiamen University, it is good time for Chinese oil companies to make overseas investment for the current low price. The price of crude oil has declined more than 50 percent comparing with the $147 per barrel of last July.

Analysts said this deal indicates that the largest refiner in Asia, Sinopec is to further expand its upstream assets abroad. Han Xiaoping, energy analyst with Beijing Falcon Pioneer Technology Co. said that Sinopec’s deal also conforms to the government’s energy strategy to diversify China’s energy supplies.

As China’s imported oil accounts for nearly half of the total oil consumption, specialists have called for a diversified source of oil importing to search for more sustainable supplies.

In recent years, Sinopec, China National Petroleum Corp (CNPC) and China National Offshore Oil Corp (CNOOC), China’s three major oil companies, have all speeded up their overseas expansion.

It is reported that China’s largest oil producer, CNPC, is negotiating with Mongolia this month about exploration and production opportunities. According to Bloomberg News’s interview of Galsan Batsukh, Mongolia’s ambassador to China, the talks will cover investing on a refinery as well as transportation and storage facilities. He said a pipeline from Mongolia to the bordering Chinese province of Inner Mongolia is included in the long-term plans.

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The project, which will be located in Binhai Industrial Zone of Tianjin, is developed by China National Petroleum Corp (CNPC) and Russia’s OAO Roseneft. It is capable of processing 10 million tons of crude oil every year.

According to the Tianjin municipal government’s sayings on its website, the construction of the project is planed to be completed in 2012. The project is part of the agreement signed by China and Russia in 2006 to enlarge the cooperation of oil and gas production between the two countries. Both sides set up a joint venture in Tianjin in 2007.

A spokesman from CNPC refused to make a comment on the project on March 2, 2009. The domestic media had reported that the oil refinery would use crude oil from Russia.

Under the loans-for-oil agreement which China and Russia signed in February of 2009, China will lend $25 billion to two major Russian oil companies in return for 20 years of sustained oil supplies from Russia.

The agreement also includes a construction of an oil pipeline linking Russian oilfields in eastern Siberia with northeastern regions in China. This first oil pipeline which links the two countries will come into use in 2010.

Analysts said that the Sino-Russian oil refinery would reduce the pressure of the increasing refined oil demand in the Bohai Bay area. The region, one of China’s economic powerhouses, has a rapid growing consumption of gasoline and diesel during the past years.

A large petrochemical complex is being built in Tianjin by the oil producer Sinopec. The project, which is expected to start operations by June, includes 1 million tons of annual ethylene production capacity and over 10 million tons of annual oil refining capacity.

“In line with China’s stimulus package for the petrochemical industry, we are now planning for more refineries in the country,” an official with CNPC told China Daily briefly on March 2, 2009.

The official who declined to be named said that CNPC’s refinery in Qinzhou in the Guangxi Zhuang autonomous region, which is also the country’s first giant refinery in southwestern regions of China, is expected to start operations by the end of 2009. The project can process 10 million tons of crude oil.

He said the second stage of this project, which is now being planned, is to add another 10 million tons of oil refining capacity.

Are you interested in the business opportunities in China?

China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.

BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.

Please visit http://www.BPOVIA.com/ for details about our service.

Given the economic slowdown and turmoil in financial market, the Bank of Japan left interest rates unchanged at 0.3 percent. This shows there is a long way for recovery. Global stock reaching a record low in five years causes fears more companies might not survive amid this economic turbulence. But there are hopes for government could do more help to make market recover.

According to a person who is familiar with the situation, Citigroup is considering several ways to save its market, including selling part of the company or merging with another firm. Such woes of a deepening recession made most Asia stocks turn sharply down last Friday. However, with the help by a rise in US stock futures, shares rebounded later. There is also hope for China does more support for the market.

A possible rescue plan of the Big Three US carmakers makes things more uncertain. A business survival plan was required by democratic congressional leaders to executives of General Motors, Ford Motor and Chrysler LLC, with giving loans up to $25 billion as exchange. Lawmakers said the plan could be considered the week of Dec 8.

What is worse, a US government report showed the number of Americans who receive jobless benefits surged to over 4 million. This is the highest in a quarter of a century. Conrad DeQuadros, senior economist at RDQ Economics in New York, said it was not just a deep recession but a long one.

Asia is no better than the US. With the economy dropped in the third quarter bigger than expected, Singapore confirmed it was in recession last Friday, and the economy could shrink further next year.

The South Korean won hit a nearly 11-year low Last Friday, down almost 40 percent this year. It is forecasted by UBS the economy could shrink 3 percent next year and its household spending dropped to a record low in the third quarter, showed by government data.

Are you interested in the business opportunities in China?

China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.

BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.

Please visit http://www.BPOVIA.com/ for details about our service.