PetroChina to Buy 45.5 Percent of Singapore Petroleum

Bloomberg

http://www.bloomberg.com

May 24, 2009
By Chua Kong Ho

May 24 (Bloomberg) -- PetroChina Co., China’s largest oil company, offered to pay S$1.47 billion ($1 billion) for a 45.5 percent stake in oil refiner Singapore Petroleum Co. to help expand its international business.

PetroChina will buy 234.5 million shares of Singapore Petroleum at S$6.25 per share from Singapore-based Keppel Corp., the company said in a statement to the Shanghai stock exchange today. That’s 24 percent higher than the last-traded price of S$5.04 at the May 22 close. The offer, when completed, will trigger a general offer for the remaining shares.

Singapore Petroleum has interests in oil and gas exploration and production projects in China, Indonesia, Vietnam, Cambodia and Australia and owns a 50 percent stake in Singapore Refining Co., which operates a 285,000 barrel-per-day refinery, the statement said. Keppel Corp, the world’s largest builder of oil rigs, is selling its entire stake in the refiner.

“China is accelerating its overseas acquisitions now because the global financial crisis has made overseas assets cheaper,” Qiu Xiaofeng, an energy analyst with China Merchants Securities Ltd. in Shanghai, said by telephone today.

PetroChina said it aims to make Singapore Petroleum a platform to implement its international strategy and “provide a broader foundation and stable path for development.”

Kazakhstan Acquisition

Singapore Petroleum said last month profit for the first quarter fell 44 percent to S$55.6 million on lower oil prices and impairment charges.

A mandatory general cash offer for the remaining shares in the Singapore-based oil refiner will be made if the necessary approvals are received on or before July 24, PetroChina’s statement said. Deutsche Bank AG advised the Beijing-based company on the acquisition.

The acquisition announcement follows PetroChina’s decision in April to pay as much as $1.4 billion for a stake in an oil company in Kazakhstan. PetroChina Chairman Jiang Jiemin said last month the company is buying 50 percent of AO Mangistaumunaigas through its unit CNPC Exploration & Development Co. Kazakhstan’s state-owned KazMunaiGaz National Co. will own the rest, he said.

To contact the reporter on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net