A state-controlled subsidiary of China Petrochemical Corp., Sinopec will pay C$52.80 per share, bidding out Korea National Oil Co (KNOC) for Addax’s prospective oil blocks in West Africa and Iraq’s semi-autonomous Kurdish region. Sinopec will acquire all of Addax?s outstanding common shares.

The bid price is 47 percent higher than Addax’s share price on June 5, before the media reported the negotiations, the companies said.

Although the deal is still subject to regulatory approval, the Addax board has unanimously approved it. Part of the deal is the sale of the shares held by its chief executive and other senior officers .

“We are pleased that Sinopec has recognized the highly attractive asset portfolio and exceptional team that we have assembled at Addax Petroleum,” chief executive Jean Claude Gandur said in a statement.

“The efforts and accomplishments that Addax Petroleum has achieved thus far will be built on through increased investment in the business and acceleration of development and exploration plans.”

Both companies issued press releases to announce the deal.

The Sinopec Group is China’s largest producer and supplier of oil products and major petrochemical products.

According to Addax Petroleum’s public records, the company has 536 million barrels of proved and probable oil reserves as of 31 December 2008 and had an average production of approximately 140,000 barrels of oil per day (equivalent to 7 million tons per year) in 2008.

SIPC is committed to corporate social responsibility and plans to retain all Addax Petroleum’s existing management and employees.

(US$1=$1.143 Canadian)

Source : Konaxis