Sinopec pays $1.5bn for Talisman stake [Oil & Gas News]CALGARY:Al Bawaba Ltd.
Talisman Energy said that Sinopec, China's top refiner, has agreed to buy a 49 per cent stake in its North Sea operations for $1.5 billion as the Canadian company looks to strengthen a balance sheet battered by weak natural gas prices.
Talisman, Canada's No 6 oil and gas exploration company, will form a joint venture with Sinopec to operate the assets, which produced 63,000 barrels of oil equivalent per day in the first quarter of 2012, about 14 per cent of the company's total output.
Talisman has long looked to lower its stake in the North Sea, where it has had little exploration success and where higher taxes have lifted costs. Chief executive John Manzoni has deployed cash generated in the region into Talisman's promising North American shale fields and its Southeast Asian oil fields.
"Talisman has delivered on two key promises for the year," Manzoni said in a statement.
"We are reducing our working interest and capital spend in the UK business by approximately half, allowing us to focus on and fund growth areas within our portfolio." It was the second major investment in a Canadian oil explorer by a Chinese company announced, after CNOOC agreed to buy Nexen for $15.1 billion. That was China's largest offer for a foreign oil producer since US regulators foiled an $18.5 billion bid for Unocal Corp in 2005.