Sinopec Said in Talks to Buy $1 Billion in Afren Assets

China Petrochemical Corp. (386), the country’s largest refiner, is in talks to buy more than $1 billion of assets from Afren Plc (AFR), people with knowledge of the matter said.

Sinopec Group, as China Petrochemical is known, is interested in Afren assets including those in Nigeria, one of the people said, asking not to be identified as the information is private. Afren, which also operates in the Kurdistan region of Iraq as well as other parts of Africa, said in November that it has been approached to sell stakes in its assets, without elaborating on the identity of the potential buyers.

Seeking to meet demand in the world’s second-largest economy, China’s state-backed firms bought a record $29 billion of energy assets abroad last year, data compiled by Bloomberg show. Beijing-based Sinopec Group agreed to buy a 20 percent stake in an offshore Nigerian field from French explorer Total SA for about $2.5 billion in November.

Afren rose 10.6 pence, or 7.4 percent, to close at 154 pence in London yesterday, valuing the company at 1.7 billion pounds ($2.7 billion).

Lv Dapeng, Sinopec Group’s spokesman, did not answer calls to his office seeking comment. An Afren official declined to comment.

Photographer: Jerome Favre/Bloomberg

A China Petroleum & Chemical Corp. storage tank stands in Hong Kong. Close

A China Petroleum & Chemical Corp. storage tank stands in Hong Kong.

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Photographer: Jerome Favre/Bloomberg

A China Petroleum & Chemical Corp. storage tank stands in Hong Kong.

Afren, based in London, had $1.8 billion of assets in Nigeria at end of 2011, and generated 92 percent of its $597 million in sales there that year, data compiled by Bloomberg show. Revenue probably more than doubled to about $1.5 billion last year after production soared to 42,830 barrels of oil equivalent a day, Afren said on Jan. 22.

Afren expects to pump as much as 47,000 barrels a day this year, excluding Iraqi output, it said.

To contact the reporters on this story: Zijing Wu in Hong Kong at zwu17@bloomberg.net; Fox Hu in Hong Kong at fhu7@bloomberg.net; Will Kennedy in London at wkennedy3@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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