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Sinopec seeks African oil through French firm Maurel & Prom

  • Staff Reporter
  • 2012-11-07
  • 15:13 (GMT+8)
Sinopec oil tanks in Tianjin. (File photo/Xinhua)

Sinopec oil tanks in Tianjin. (File photo/Xinhua)

Sinopec is planning to acquire French public oil and gas company Maurel & Prom for US$2 billion, according to French media.

The Chinese state-run oil giant can develop its business in Africa through Maurel & Prom's existing operations there and dodge the possible obstacle of local government supervision if the deal goes ahead.

The two companies have unofficially started negotiating a merger since the beginning of the year but the process has not been going well, according to a report from Bloomberg.

Maurel & Prom had held similar but unsuccessful negotiations with several international oil companies, such as a potential deal with an Indian oil company. The French company also rejected a merger proposed by the second largest oil company in the United States, Anadarko Petroleum Corporation.

Though the size of Maurel & Prom's operations is relatively small compared to other international oil companies, the company has secured oil resources in some African countries such as Gabon and Tanzania. The company announced in October that its oil production in Gabon has reached 20,000 barrels per day.

Obstacles posed by local governments has become a key concern for Sinopec and other Chinese energy companies as they seek to expand their global operations in Canada and the United States in particular.

Cui Xinsheng, chairman of Chinese Petroleum Investment Fund Management Limited, said Chinese oil companies have encountered many difficulties in overseas mergers and acquisitions, where regulations and political considerations often hinder deals.

Who's Who

  • Xu Shaoshi (徐紹史)

    Xu Shaoshi (徐紹史)

    Xu Shaoshi is the minister in charge of the National Development and Reform Commission, China's economic planning agency. Between 2007 and 2013, he ...