China's Sinopec buys stake in Egyptian oil field
U.S.-based Apache plans global partnership
Chinese state-owned oil producer Sinopec has expanded its Middle East presence with the $3.1 billion US purchase of a stake in an Egyptian oil and gas production operation.
U.S.-based Apache Corp. said Friday it will sell a 33 percent stake in its Egypt operation to Sinopec as the first step in forming a global partnership to pursue oil and gas projects.
China's state-owned oil industry, flush with cash from the country's economic boom, is buying minority stakes or outright control of oil and gas fields in the Middle East and elsewhere to profit from future global demand and secure supply for its growing economy.
Some of those projects are in areas such as southern Iraq that Western oil companies consider too dangerous or in politically shunned nations such as Sudan.
Apache said the latest sale includes oil and gas production assets in Egypt's Western Desert. It said the remote, unpopulated area has not been affected by political developments in Egypt.
Apache's Egyptian operations produced about 100,000 barrels of oil and 354 million cubic feet of natural gas per day in 2012, according to the company.
Disappointing production and investor concern over Apache's high exposure to Egypt have pressured the company's stock and the U.S. producer is selling off non-core assets so it can concentrate on domestic production.
Sinopec rival China National Petroleum Corp., China's biggest oil producer, has invested heavily in Iraq. CNPC also has holdings in Canada, including in oilsands properties.
Sinopec, also known as China Petroleum & Chemical Corp., is Asia's largest oil refiner by volume and China's second-biggest producer. Its Daylight Energy Ltd. unit operates in Canada with holdings in Alberta and northeast British Columbia and Sinopec has invested in the Northern Gateway pipeline.
With files from CBC News