By Benjamin Haas
Dec. 24 (Bloomberg) -- China Petrochemical Corp., the nation’s biggest oil refiner, completed the purchase of Canada’s Daylight Energy Ltd. for about C$2.2 billion ($2.16 billion), the company said in an e-mailed statement yesterday.
Sinopec, as the Chinese company is known, said it paid C$10.08 a share in cash for Calgary-based Daylight.
Cong Peixin, a spokesman for the China Petrochemical unit that carried out the transaction, declined to elaborate on the statement. Daylight confirmed the completed sale in a statement released yesterday.
The purchase gives the Beijing-based company access to more than 300,000 acres of land in areas rich with oil and natural gas, after falling crude prices made valuations attractive.
Sinopec Group, China National Petroleum Corp. and Cnooc Ltd. are seeking to gain technology through partnerships in order to develop China’s shale-gas reserves, estimated to be larger than those in the U.S.
China, the world’s biggest energy consumer, has partnered with Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. to explore possible shale wells.
Chinese companies have announced $18.3 billion worth of bids this year for overseas oil and gas exploration and production companies, according to data compiled by Bloomberg. Cnooc bought Canada’s Opti Canada Inc. in November for $34 million in cash, agreeing to take on $2.4 billion in debt.
Daylight’s proven and probable reserves rose 46 percent to the equivalent of 174 million barrels of oil at the end of 2010, the company said March 1. The company’s production was 35 million barrels in the third quarter, according to data compiled by Bloomberg.
http://www.businessweek.com/news/2011-12-27/china-petrochemical-corp-completes-purchase-of-daylight-energy.html
1 comment:
China Petrochemical Corp has completed the purchase of Canadian Daylight Energy Ltd. for about $2.2 billion. It paid $10.08 per share. CNOOC, another Chinese firm, bought Canadian Opti Canada Inc. in November for $34 million. This is a big difference from the rejection of BHP’s takeover where the government went out of its way to ban the foreign acquisition. It seems that all is forgotten, as Chinese companies are buying up more and more energy companies in Canada. But it raises the question of why Canada is not keeping the energy companies to themselves. China is the world’s largest energy consumer. It would make sense to keep the energy companies to sell oil or other resources to the Chinese in future. Canada had the ability to veto this takeover if they wanted to because this is only beneficial to Canadian economy for now. Daylight Energy was struggling and Canadian Opti Canada Inc. was $2.4 billion in debt. Why buy companies that are not thriving? Clearly, the incentive to buy these energy producers greatly outweighs the disadvantages. China Petrochemical Corp bought Daylight Energy shares at double what they were originally worth. This shows a high interest in Canadian energy companies. But for what reason? There are more questions than answers and for now Canada has made high profits in the short term.
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