Brightoil is to snap up Anadarko’s Chinese assets in a £646million deal.
The Hong Kong-based supplier of marine fuel will pay cash for the US firm’s entire 40 percent and 29 percent interests in the two offshore blocks at Bohai Bay.
The move comes as Brightoil chairman Raymond Sit Kwong Lam’s looks to diversify earnings, as about 98 percent of the company’s revenue comes from marine bunkering and sales of petroleum products.
Sit said in September Brightoil will continue to grow its oil and gas exploration and production business, and sees it as a key growth driver.
The two blocks in Bohai Bay, north east China, produced about 32,000 barrels of crude oil a day in 2013, Brightoil said.
It will gain 40 percent of the offshore block of 04/36, which covers an area of 124 square kilometers, as part of the deal, the company said. Operator CNOOC and Singapore Petroleum hold 51 percent and nine percent respectively in the block.
Brightoil will also get a 29 percent stake in the area labeled as 05/36, which covers an area of 88 square kilometers, with the rest held by CNOOC, Newfield Exploration and Singapore Petroleum
“We believe that the acquisition will mark a major milestone in our business development,” said Sit.
“Building on a strong foundation in oil and gas exploration and production, the acquisition will help reinforce our overall strategy and facilitate its development as an integrated oil and gas company with sustainable revenue streams.”
Anadarko’s exploration block in the South China Sea is excluded from the deal, Brightoil said in the e-mailed statement.
“It’s a positive move for Brightoil as it finally managed to secure a quality upstream asset after years of trying,” said Shi Yan, an analyst at UOB-Kay Hian in Shanghai.
“The steady income from oil and production could immediately lift the company from over-reliance on bunker oil trading.”
Brightoil jumped 27 percent to HK$2.81 at the close of trade in Hong Kong, its biggest gain in at least five years.