Africa call­ing

China Petro­chem­i­cal Corp, Asia’s top re­finer, is ex­pand­ing in Africa through in­vest­ment and so­cial in­volve­ment, Du Juan re­ports

China Daily (Hong Kong) - - FRONT PAGE -

Sinopec Group, Asia’s largest oil re­finer, is ex­pand­ing its pres­ence in Africa through in­vest­ment and so­cial in­volve­ment.

As Africa be­comes in­creas­ingly im­por­tant in the global en­ergy struc­ture, with grow­ing proven re­serves of oil and nat­u­ral gas, China Petro­chem­i­cal Corp has big plans for the con­ti­nent.

In the next five years, the com­pany — usu­ally called Sinopec — plans to in­vest another $ 20 bil­lion in Afr ica and deepen co­op­er­a­tion and ex­changes with African gov­ern­ments, com­pa­nies, peo­ple and other stake­hold­ers, said Fu Chengyu, chair­man of Sinopec.

Hav­ing op­er­ated in Africa for the past 20 years, the com­pany’s as­sets there to­taled $22 bil­lion as of June 30, ac­cord­ing to its of­fi­cial state­ments.

As of the end of last year, it was do­ing busi­ness in 15 coun­tries across Africa, with op­er­a­tions span­ning up­stream ex­plo­ration and de­vel­op­ment, petroleum and petro­chem­i­cal engineering ser­vices, oil trad­ing, geo­ther­mal projects and re­fin­ing in­vest­ment.

Africa was Sinopec’s first step to­ward in­ter­na­tion­al­iza­tion back in the 1990s. Since 1993, Sinopec has been pro­vid­ing the con­ti­nent with oil­field ser­vices, help­ing the lo­cal ex­plo­ration in­dus­try.

The years of ef­fort have paid off for both sides. In 2012, Sinopec’s over­seas as­sets ac­counted for 36.5 per­cent of its to­tal as­sets, and over­seas sales rep­re­sented 31.6 per­cent of the to­tal.

Mean­while, the com­pany paid more than $4.3 bil­lion in taxes and fees to var­i­ous gov­ern­ments in Africa last year and cre­ated more than 9,000 jobs.

Sinopec’s lat­est move in Africa came on Nov 14, when it com­pleted the ac­qui­si­tion of onethird of Apache Corp’s Egyp­tian oil and gas busi­ness for $3.1 bil­lion. Apache is an in­de­pen­dent United States-based up­stream oil and gas com­pany, which has 24 con­trac­tual blocks in Egypt.

The two sides formed a global strate­gic part­ner­ship on Aug 30.

Most en­ergy re­sources in po­lit­i­cally sta­ble African coun­tries have al­ready been taken up by the in­ter­na­tional oil gi­ants from de­vel­oped coun­tries, so China’s play­ers have to buy as­sets in riskier lo­ca­tions to sat­isfy soar­ing do­mes­tic de­mand.

How­ever, Sinopec said the op­er­a­tions in Egypt aren’t be­ing af­fected by po­lit­i­cal tur­moil.

In 2009, the com­pany bought Ad­dax Petroleum, a Swiss com­pany that was listed in Toronto and Lon­don.

Sinopec Ad­dax Petroleum has be­come a key over­seas sub­sidiary, ac­count­ing for about one-third of Sinopec’s to­tal over­seas oil out­put. The sub­sidiary’s oil and gas as­sets in Africa are mainly in Nige­ria, Gabon, Cameroon, Nige­ria and Sao Tome and Principe.

Busi­ness de­ci­sions

As of the end of June 2013, Sinopec had cu­mu­la­tive in­vest­ment of about $14.1 bil­lion in Africa. Sun Shangru, deputy man­ager of the Sinopec Ad­dax Petroleum Gabon project, told China Daily that the com­pany aims to make busi­ness de­ci­sions in the re­gion based on crude oil prices and po­lit­i­cal risks.

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