February 23rd, 2010 | People's Daily China oil giants join hands for Caspian Sea oil field
In the battle for the world’s oil resources, state owned oil giants China Petroleum & Chemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC) may once again stand side by side.
Recently, media reported that these two major oil companies are considering the purchase of 5.6 percent interest in the Azeri-Chirag-Gunashli oil field (hereinafter referred to ACG) in Azerbaijan. This oil field is held by the U.S. oil company Devon, and the bid is reportedly worth about 30 billion U.S. dollars.
At present, neither Sinopec nor CNOOC has confirmed this news. However, a person at Sinopec told the reporter on February 22 that “the acquisition is just at the beginning stage when relevant sides begin to contact and has not entered the substantive operational phase, so it is too early to talk about acquisition.”
It is understood that in accordance with procedures, companies interested in purchasing ACG shares will submit bids for the first round in late March.
Sources say that in addition to Sinopec and CNOOC, more than 10 international oil companies including Inpex and Itochu have shown interest in participating in bidding process.
When competing for overseas oil resources, cooperation like that between Sinopec and CNOOC in this case are becoming increasingly common.
An industry expert said a joint purchase by Sinopec and CNOOC can give full play to the advantages of the two companies: Sinopec has an edge in financial and human resources, while CNOOC has the technical and management experience in deep-sea development.
In fact, Sinopec had successfully entered Azerbaijan before this. At present, Sinopec has a stake in two projects: K & K and the Gobustan, with investment of more than 250 million U.S. dollars. In recent years K & K project has maintained an annual output of about 300,000 tons of crude oil and it is Azerbaijan’s largest onshore oil field.