Sunday, Chinese oil and natural gas giant PetroChina Company Limited (PTR) said that it has agreed to acquire about 45.51% of the total issued share capital of publicly listed Singapore Petroleum Company Limited, for a cash consideration of S$1.47 billion or US$1.02 billion, signaling China's move to extend its reach into global natural resources companies.
PetroChina signed the deal through its indirectly wholly owned subsidiary, PetroChina International (Singapore) Pte. Ltd, with Keppel Oil and Gas Services Pte Ltd, a wholly owned subsidiary of Keppel Corporation Limited, to purchase its entire stake in Singapore Petroleum or SPC at S$6.25 per share, to be paid in full on completion.
If and when the deal is completed, subject to approval from Chinese regulatory authorities, PetroChina International (Singapore) Pte. Ltd. plans to make a offer for the remaining shares of SPC.
Regional energy company SPC, with interests in oil and gas exploration refining and marketing, is one of the nation's three major refining companies. It has exploration interests in Australia, China, Indonesia and Vietnam. It also conducts terminalling and distribution and trading of crude and refined petroleum products.
PetroChina in a statement said, the acquisition is likely to "become a new platform for the implementation of our international strategy and will provide a broader foundation and stable path for development."
PetroChina and Keppel also plan to explore opportunities in the offshore oil industry and in other areas of mutual benefit as such opportunities become available. Keppel is part owned by Singapore's Temasek Holdings Pte. Ltd. investment company.
Choo Chiau Beng, chief executive officer of Keppel said, "Over the last 10 years, Keppel has grown SPC, establishing it as a reliable supplier of quality energy products while diversifying its businesses upstream into exploration and production. This divestment of our stake in SPC would enable Keppel to seize opportunities that would enhance value creation for shareholders."
Deutsche Bank acted as Sole Financial Advisor and Drew & Napier is acting as Legal Advisor to PetroChina International (Singapore) Pte. Ltd for the transaction.
For the first quarter of 2009, PetroChina produced 205.7 million barrels of crude oil, down 5.7% from 218.1 million barrels in the same period of last year. During the quarter, PetroChina processed 185 million barrels of crude oil, a drop of 14.6% from the previous year, and the company produced 16.366 million tons of gasoline, diesel and kerosene, which declined 13.5% from last year. Average realized price for crude oil plunged 57.8% to US$37.10/barrel from last year's US$87.93/barrel
Consolidated net profit, on International Financial Reporting Standards, basis, for the first quarter was RMB 18.86 billion, down from RMB 33.48 billion a year ago. Net profit attributable to owners of the company plunged 35.3% to RMB 18.96 billion from last year quarter's 29.31 billion. Turnover plunged to RMB 181.58 billion from RMB 259.43 billion last year.
PTR rose $0.06 or 0.06% and closed Friday's regular trading at $108.42 on volumes of 199 thousand shares. In extended trading, PTR rose further, gaining $0.45 or 0.42% to $108.87. The stock has traded between $56.30 and $146.75 during the past year.
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