MercoPress. South Atlantic News Agency

China’s Sinopec buys 30% stake in Portugal’s Galp operations in Brazil

Sinopec is the largest oil and petrochemical products company in China

Chinese oil group Sinopec officially completed a deal to buy a 30% stake in Petrogal Brasil which is responsible for oil and gas exploration and production activities of Portugal’s Galp Energia in Brazil.

The volume of the operation announced by the Galp Energia group in Lisbon is 4.8 billion dollars.

In the statement published by the Portuguese stock market regulator, CMVM, the capital increase of Petrogal Brasil has now been concluded and Sinopec subscribed the entire 4.8 in Petrogal Brasil and other related companies.

Also according to the statement, Sinopec provides Petrogal Brasil with a shareholder loan of 360 million dollars, which will be used to pay off shareholder loans from Galp Energia in the same amount, which means that in total Galp Energia has netted 5.2 billion dollars from the transaction.

The Sinopec group is the biggest oil and petrochemical products company in China and the second in terms of oil production. The Galp deal follows the recent operation by Sinopec acquiring a unit of Repsol YPF in Brazil for 7.1 billion dollars, China’s biggest oil investment deal.

The completion of the acquisition will further expand Sinopec's overseas oil and gas business and give the company an additional daily output of 21.300 barrels of oil equivalent (BOE) by 2015 and 112.500 BOE per day in 2024, according to Sinopec.

Galp, Portugal's largest oil association that holds stakes in 33 blocks offshore Brazil started a bidding process earlier last year, as it was looking for a partner to help finance its Brazilian projects. Sinopec will have board seats and representation in the company as part of the deal.