Repsol sells 40 percent of Brazilian affiliate to Sinopec
Spanish energy giant Repsol Friday announced the sale of 40 percent of its Brazilian affiliate to China's Sinopec for 7.1 billion dollars, securing funding for the further development of Brazil's massive offshore oil reserves.
"Respol Brazil will make a capital increase of more than 7.1 billion dollars (5.2 billion euros) that will be fully subscribed by Sinopec, resulting in a company with a value of 17.8 billion dollars," the group said in a statement.
"After the operation, Repsol will hold 60 percent of the capital of the company and Sinopec, China's largest oil group, 40 percent.
"This company will become one of the largest private energy groups in Latin America."
It said the operation will allow the joint company "to meet the total investment needed for the development of assets in Brazil, including some of the biggest discoveries the world, such as those obtained in the blocks of Guara and Carioca."
Repsol and Sinopec will continue with expansion plans in Brazil and "participate, jointly or separately, in future rounds of tenders in the country."
Sinopec is the largest petroleum and petrochemical company in China and is involved in exploration and production in more than 20 countries, Repsol said.
It is looking for overseas investments in oil and gas resources to meet China's soaring demand for energy and commodities.
Shares in Repsol, Spain's largest oil group with a major presence in Latin America, jumped more than 5.0 percent on the Madrid stock market following the announcement, to 19.84 euros.
Repsol chairman Antonio Brufau said the Sinopec agreement "highlights the success of the exploration actitivies made by Repsol in recent years.
"We are delighted to share the development of Repsol's Brazilian projects with a such prestigious partner in the sector as Sinopec."
© 2010 AFP