Sinopec and China National Offshore Oil Corp (CNOOC) are each paying a unit of UK-based BG Group US$615m to acquire one-twelfth stakes in a Kazakhstan oil and gas field. The stakes will give both companies participation in a project covering 5,600 sq km in the North Caspian area of Kazakhstan. It includes the Kashagan oil and gas field, where production has not yet started but which has estimated recoverable reserves of up to 13bn barrels of oil equivalent.
CNOOC spent more than US$1.1bn on three purchases last year, including gas field purchases in Australia and Indonesia, but this is Sinopec's first overseas acquisition. These moves show that China is seeking to reduce its dependence on the Middle East, which currently supplies more than half of China's oil imports. Even so, China's oil majors are still looking to strike deals in the region. For example, last month China National Petroleum Corp secured a US$108m exploration and production contract in Syria. CNPC claims it was the first tender won by a Chinese company in the Middle East oil sector.