Monday, December 27, 2010

The Sky is the Limit For China´s Sinopec Investments in Brazil

Brazil Energy magazine reports that Sinopec plans to go far beyond Brazil's recently announced purchase of 40% of Repsol YPF Brazil. Besides that $ 7.1 billion investment the group is currently evaluating offers in Shell, Sonangol, Statoil, STR, OG and HRT ensuring participation in future bidding rounds for exploration areas. In addition, they play on bringing to Brazil four land drilling rigs.

Apparently there is no maximum investment; the Chinese want to strengthen their image as an oil and gas company in Brazil, either as oil, service provider or investor. Sinopec was chosen by the Chinese government as the leading state company in the country responsible for leveraging business here.

The fact is that Brazil has become the preferred market of Sinopec, and the Brazilian subsidiary is the chosen priority. This goal is guided the state´s vision aimed at ensuring new oil supplies to China and reduce the risk of supply than by business reasons.

The plans are long term, for the next 10 to 15 years. The local subsidiary will also manage the entire operation of the group in Latin America, which involves business in Colombia, Venezuela, Ecuador, Mexico and Argentina.

The strategy, says Carlos Stenders, deputy general manager of Sinopec Brazil, not only includes stakes in exploration blocks. "We do not want to be just an investor, our intention is to trade blocks, at sea or land," he predicts.

Having been in Brazil for six years, Sinopec has today in the country about 200 employees. During the peak period of the work with Gasene, the company grew to more than 2,000 employees spread across Rio de Janeiro, Vitoria and Teixeira de Freitas (BA).

 Sinopec has entered into no less than 21 projects, in 20 marine areas, and participation in an exploratory Albacora Leste, in the Campos Basin.

The portfolio includes assets in the basins of Pará-Maranhão, Campos, Santos and Espirito Santo. And the company becomes a member of the assets of Guara and Carioca, in the Santos pre-salt.

Despite considerable regional weight, the Brazilian portfolio is still small compared to the global portfolio of the group. Africa accounts today for the largest area. "We're still feeling the Brazilian market," adds Stenders.

The group also will bring to Brazil in early 2011 four land drilling rigs themselves. The devices were operating in the Middle East and at the moment, are in final stages of refurbishment to be shipped into the country.

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