Financial Times: CNPC, ONGC link in Syria: “The 38 per cent stake in the Royal Dutch Shell-controlled Al Furat Production Company was sold by Petro-Canada, one of Canada's largest energy groups, for C$676m (US$576m)…”: Wednesday 21 December 2005
By Gordon Smith in London
Published: December 21 2005
China National Petroleum Corporation (CNPC) and India's Oil and Natural Gas Corporation (ONGC) yesterday reached agreement to buy a stake in Syria's largest oil producer amid growing signs that two of the world's fastest growing economies are prepared to collaborate to secure scarce natural resources.
The 38 per cent stake in the Royal Dutch Shell-controlled Al Furat Production Company was sold by Petro-Canada, one of Canada's largest energy groups, for C$676m (US$576m) after it completed a review of its portfolio. This is the first time the Chinese and Indian state-owned companies have agreed a deal and the first time groups from each country have secured upstream resources in the Middle East.
Colin Lothian, an analyst at energy consultancy Wood Mackenzie, said the deal indicated that the two countries were prepared to work closer together. "It's the first time both companies have worked together on a deal and indicates the commitment of both to actively pursue opportunities that will help them secure their respective countries' energy demands in the future."
The agreement is also a sign that greater efforts are being made by energy groups from emerging economies to move beyond the US sphere of influence in their hunt for new sources of energy, in spite of potentially greater economic risks.
Petro-Canada said the deal, which priced eachbarrel of oil equivalent at $12-$13, represented a "full price".
The interest represents just 21,000 barrels of oil equivalent per day afterroyalties.
The proved and probable reserves were estimated at 31m boe after royalties.
Petro-Canada was advised by Harrison Lovegrove. CNPC and ONGC were believed to have been advised by Citigroup.
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