Sinopec considering bid for Urals Energy - Russia
This article is extracted from International Oil Letter, Vol 24 issue 52, published 22 December 2008.
Russian media claims that China's Sinopec is in talks to submit a bid of around US$ 133 million for Urals Energy before year-end 2008. If correct, Sinopec will be paying almost five times the value of Cyprus-registered Urals on the London Stock Exchange, where it is listed with a market capitalization of US$ 28.81 million. China has been vying for a greater slice of neighboring Russia's energy resources and has plans with Russia to conclude a 15-year oil supply deal. In Russia, Sinopec is developing the Sakhalin 3 oil and gas project on the Pacific island of the same name along with state oil major Rosneft.
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In 2006, it bought a production unit from TNK-BP for US$ 3.5 billion. Urals Energy’s main exploration and production operations, as well as most of its oil and gas reserves are in East Siberia. These were independently assessed at end March 2007 at 579 MMboe (proved + probable), subsequent to which Urals acquired equity in the Srednebotuobinskoye field, also in East Siberia and this raised the company’s total net reserve base to 822 MMboe. The attraction for Sinopec is very apparent. The bulk of Urals Energy's future forecasted production, 70,000 bo/d by 2013, will come from its Dulisminskoye and Srednebotuobinskoye fields in East Siberia near Transneft's East Siberian Pacific Ocean (ESPO) pipeline, which is under construction and projected to be available for Dulisminskoye at the end of 2008 and for Srednebotuobinskoye at the end of 2009
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