China Buys Addax for £4.4bn to Tap Iraqi Oil
June 24th, 2009WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Who provided the credit for the U.S. to go to war in Iraq? Mmm hmm.
See the part in bold below for a hint on where oil prices are headed.
Via: Telegraph:
China has made its first big foray into Iraq in a C$8bn (£4.4bn) deal to buy London-listed oil explorer Addax Petroleum.
The board of Addax, which is also listed in Toronto and based in Switzerland, has recommended a C$52.80 per share offer from Sinopec, the Chinese state oil and gas company.
Addax has oil assets in West Africa and the Middle East, particularly the Kurdistan region of northern Iraq. The company has increased its crude oil production from 8.8m barrels per day ten to 134.7m barrels per day over the last ten years.
There has been a scramble for oil assets in Iraq’s Kurdish region, which is more open to foreign investment than Baghdad. Heritage Oil, also a London listed explorer, agreed to buy Addax’s partner in Kurdistan, Turkey’s Genel Energy, for £1.5bn earlier this month.
Addax and Genel both produce oil at Taq Taq, with the intention of increasing its production from 40,000 barrels a day to a peak production of 180,000 barrels a day.
Sinopec’s offer represents a 47pc premium to the closing price on June 5, the day before Addax announced it was in preliminary discussions with Sinopec and others about a potential deal. Its shares rose 282, or 12pc, to £26.50 in London
The offer from the cash-rich Sinopec, an abbreviation of the China Petrochemical Corporation, does not rely on outside financing. It will have to pay a termination fee of C$300m if it withdraws from the acquisition, which needs the approval of the Chinese government by the end of August.
The Telegraph seems a little confused…
According to this it’s 140,000 per day:
http://www.cbc.ca/money/story/2009/06/24/addax-sinopec-takeover.html
Addax had 536 million barrels of proved and probable oil reserves as at Dec. 31, and production of approximately 140,000 barrels of oil a day.
i sort of suspected they had their millions confused with their thousands. and the writer/editor had no knowledge of global daily crude oil production. the 536m barrels of reserves sounds impressive, but i notice it includes “probable”, which is a bit of an accounting lark. it certainly shows China is determined to spend as many of its soon-to-be-worthless chips as it can on real stuff before the casino closes its doors for good.