China Energy M&A Deals in 2011, 2012

24.01.2012 -

Fast-growing, resource-hungry China continues to invest in oil and gas assets from Canada to Latin America to Australia in 2011, and also sees a few acquisitions in the nuclear sector. Below are details on China's M&A activity, energy deal approvals, and high-profile deals that failed in 2011 and 2012.

Projects And Deals

- China's Sinopec agreed with U.S. oil and gas producer Devon Energy Corp that Sinopec will invest $2.2 billion for a third of Devon's interest in five developing fields as part of a long-term partnership, the companies announced in January 2012.

-Sinopec Group agreed in December 2011 to increase its stake in the $20 billion Australia Pacific LNG joint venture from 15% to 25%, and to buy 3.3 million tons more LNG a year through 2035 from the project, bringing the project a step closer to moving forward on the second phase.

 - Sinopec Group reached an agreement with Galp Energia SGPS SA of Portugal to acquire a 30% stake in Galp Brazil Services for $3.54 billion, Sinopec Group said in November 2011.

- Sinopec Group signed a deal to buy Canadian oil and gas explorer Daylight Energy Ltd for C$2.2 billion ($2.1 billion) in October 2011, underscoring China's quest to secure enough energy to power its booming economy.

- Sinopec Group acquired a 15% stake in the giant coal seam project owned by U.S. energy firm ConocoPhillips and Australia's Origin Energy Ltd. It also signed an agreement in April 2011 with Australia Pacific LNG (APLNG) for 20 years' worth of LNG, China's second-largest gas purchase agreement.

- Sinopec Group acquired an 80% stake in Pecten Cameroon from Royal Dutch Shell for $538 million via its subsidiary Addax Petroleum, Sinopec Group said in November 2011, gaining its first oil production assets in the African country.

- Sinopec International Petroleum Exploration and Production Corp (SIPC), a wholly-owned unit of state-owned Sinopec Group, has completed the purchase of an 18% stake in Chevron's Indonesian deep-water project for $680 million, Sinopec Group said in October 2011.

- China's top offshore oil company, CNOOC, formed a joint venture with Canada's Nexen in the Gulf of Mexico, Nexen announced in November 2011. CNOOC will hold a 20% stake in the Kakuna, Angel Fire and Cypress deepwater exploration wells, and 10 to 25% stakes in three other Nexen exploration wells.

- CCNOOC completed a C$2.1 billion ($2.04 billion) acquisition of Opti Canada in November 2011, giving China's top offshore oil company its second stake in a Canadian oil sands property.

 - CNOOC struck its second shale gas deal with Chesapeake Energy in January 2011 to buy a 33.3% stake in the U.S. natural gas producer's leasehold acres in northeastern Colorado and southeastern Wyoming for $570 million, following a deal in October 2010 to buy a 33.3% interest in Chesapeake's Eagle Ford Shale project in southern Texas for $1.1 billion.

 - China's largest oil producer PetroChina agreed to buy out Canada's Athabasca Oil Sands Corp's 40% interest in the MacKay River project in northern Alberta for C$680 million ($674 million) in January 2012, becoming the first Chinese state-owned company to wholly own a Canadian oil sands development.

- PetroChina completed a $1 billion deal in July 2011 to acquire a 50% stake in British chemical group Ineos' European refining business, including the plants at Grangemouth in Scotland and Lavera in France.

 - Sinochem, the Chinese state-owned petrochemical group, agreed to buy 10% stakes in five offshore oil blocks in Brazil's Espirito Santo basin from London-based Perenco, the companies said in January 2012, expanding Chinese penetration of Brazil's fast-growing offshore oil frontier.

- Australia's Kalahari Minerals, the top shareholder in one of the world's largest uranium projects, has agreed to be taken over by China Guangdong Nuclear Power Corp in a cash deal valuing $991 million in December 2011.

Chinese Deals Gone Awry

- China Gas Holdings rejected an unsolicited $2.2 billion cash bid from state energy giant Sinopec and ENN Energy in December 2011, saying it failed to reflect the fundamental value of the company. - BP's $7 billion deal to sell its 60% stake in South America's Pan-American Energy (PAE) to Argentina's Bridas, which is half-owned by CNOOC, collapsed in November 2011, due to what Bridas said were "legal issues."

 - In June 2011, PetroChina and Canada's Encana called off an announced $5.6 billion deal that would have given the Chinese group a 50% stake in some of Encana's shale gas assets.