China takes big dip into N Sea oil

China's top refiner Sinopec Group has acquired a 49 percent stake in the UK subsidiary of the Canada-based Talisman Energy Inc for USD 1.5 billion, marking the first direct investment by a Chinese company in the North Sea, the state-run China Daily reported Wednesday. The transaction came as the entry of Sinopec into the oil and gas business in the North Sea region and is also the largest UK-focused deal in the energy sector this year, according to the newspaper. The Beijing-based company said the two parties will strengthen their cooperation to explore resource potential and accelerate the evaluation and commercial development of these assets. "Sinopec is well positioned to increase the production capacity of the mature oil fields, while Talisman has ample project experience in the North Sea. It will be a mutually beneficial cooperation," the company was quoted as saying. Talisman's UK subsidiary is headquartered in Aberdeen, United Kingdom, and has interests in 51 North Sea oil and gas fields. It has remaining proved plus probable reserves of 489 million barrels of oil equivalent, of which 95 percent is crude oil. In 2011, the company's daily oil and gas output reached 71,000 barrels. After the completion of the deal, Talisman will continue to hold 51 percent of the joint venture. The completion follows two big overseas acquisitions by China's biggest oil producer PetroChina Co Ltd., which agreed to buy BHP Billiton Ltd's stake in a liquefied natural gas project in Australia for USD 1.63 billion on Dec 12, and joined the Canadian company Encana Corp to develop a shale gas project in Alberta at a price of USD 2.14 billion on Friday. The North Sea had a daily output of 2.7 million barrels of liquid fuel in October, according to the energy and commodities market agency Argus Media Ltd. The area has had a total output of 40 billion barrels so far, and the potential remains to produce a further 14 billion to 24 billion barrels of oil equivalent over the next 30 years. China will import about 60 percent of the 500 million tons of oil it uses in 2013, government officials said at an industry conference last week, the daily said. Since China became a net importer of crude oil in 1993, it has gone from importing 6 percent of the oil it consumes to more than 50 percent in 2009. The government is now encouraging Chinese companies to go overseas to seek energy resources to meet growing domestic demand.