China Petroleum & Chemical Corporation (Sinopec), China’s largest refiner, and CNOOC Ltd. agreed to buy a 20% stake in Angola’s offshore deepwater Block 32 for $1.3 billion from Marathon Oil Corp. Marathon Oil, the fourth-largest U.S. oil company, will keep a 10% interest in the block, site of 12 announced petroleum discoveries, after the sale, which is expected to close by year- end, the companies said today in separate statements.
It would be the fourth and largest divestiture this year of an exploration and production stake by Houston-based Marathon Oil, the largest U.S. Midwest oil refiner, after it announced an asset review in March 2008. Marathon had initially sought an Angola transaction valued at more than $2 billion, said Mark Gilman, an analyst at The Benchmark Co. in New York. “Marathon’s thoughts as to the value of this interest, at least in our view, were way out of line previously,” said Gilman, who has a “hold” rating on Marathon shares and owns none. “It’s still a good price for them.” Lee Warren, a Marathon Oil spokeswoman, said the Angola deal “indicates substantial value that we’re receiving.” She declined to comment on whether Marathon sought a price higher than $1.3 billion.
Marathon Oil has said its review and sale of assets would generate $2 billion to $4 billion on a pretax basis. The company said April 30 that it had announced transactions valued at about $1.6 billion. Marathon said in June that it agreed to sell its stake in an offshore Ireland natural-gas project to Vermilion Energy Trust for at least $235 million. Marathon Oil also has completed the sale of U.S. oil and natural-gas fields for $181.1 million to Apache Corp. It sold an Irish unit to Petroliam Nasional Berhad, or Petronas, Malaysia’s state-owned oil company, for $180 million in April. Today’s announcement brings the total value of announced asset sales by Marathon Oil to more than $3 billion since March 2008. Read the rest of this entry »
