Sinochem Petroleum Limited(Cayman), a wholly-owned subsidiary of Sinochem, has completed on February 2, 2007 the purchase and acquisition of 100% of the units in New XCL-China, LLC (“New XCL”).The headline purchase price is approximately US$218 million, and the total consideration paid after giving effect to various adjustments and interest is approximately US$228 million.
New XCL was a privately owned Delaware limited liability company whose sole asset is a non-operated 24.5% stake in the Zhao Dong petroleum block in Bohai Bay, offshore China.The major shareholders of New XCL were financial investors including Trust Company of the West, Jefferies & Company, Inc. and Putnam.
The Zhao Dong block lies in less than five metres of water on the west side of the Bohai Bay in the North China basin.Production from the block began in 2003 and peaked in 2005 at just under 30,000 b/d from the C and D fields.Further development upside exists in the C-4 accumulation to the north of the producing C and D fields where development is underway.
The Acquisition represents Sinochem’s entry into the domestic petroleum E&P industry in China, and complements our international petroleum production portfolio. From the perspective of Sinochem’s global petroleum picture, it is of unique significance.Sinochem currently has international petroleum E&P operations in Ecuador, Tunisia and the United Arab Emirates.
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