Chinese oil company, Sinopec has announced conclusion of the buy-out of Canadian oil independent, Addax Petroleum Corporation.
In a joint statement by both companies, Sinopec and Addax Petroleum revealed that they are “pleased to announce that 153,734,120 common shares of Addax Petroleum Corporation, which represent approximately 92.67 percent of the Addax Petroleum common shares on a diluted basis, have been tendered to the offer dated July 9, 2009 made by Mirror Lake Oil and Gas Company Limited.”
Mirror Lake is an indirect wholly-owned subsidiary of Sinopec.
The statement added that “since all of the conditions to the Offer have been satisfied, Mirror Lake has taken up all of the Addax Petroleum common shares tendered to the Offer as of this date”.
Sinopec International also said that it has extended the expiration date of its offer, which was scheduled for Friday, by 13 days.
The deal, worth $9 billion, including all Addax Petroleum debts, is the biggest takeover of a foreign company by a Chinese company according to energy analyst Toyin Akinoso. The board of directors of Addax Petroleum will be replaced by nominees of Sinopec International, but Addax’s chief executive, Jean Claude Gandur, would remain as a director in Addax.
Implications for Nigeria
Speaking on the implications for Nigeria, Mr. Akinoso said: “Things still remain unclear how the Chinese are going to go about it. But one thing is certain: they’re going to rely heavily on the guys that have been running the company. It’s the first time a Chinese company is taking over a Western oil company anywhere in the world that I know of.”
A top executive of Addax Development Company Nigeria, told NEXT in a telephone interview that the Sinopec offer was too good to be refused given the global financial crunch and Addax’s share price at the time.
He also said: “It’s not Addax Nigeria which was sold but the Addax Corporation. The Corporation and Addax Nigeria don’t have any agreements in place, and change of ownership or not, business continues, production will still continue.”
On the acquisition’s implication for Nigeria, he said, “The top management will stay for a year or less before they’re eased out. For Addax Nigeria, the Chinese cannot just come in and takeover everywhere. There’s an expatriate quota policy by the Department of Petroleum Resources and the Ministry of Internal Affairs, which will have to be considered.”
He allayed fears over the security of the Nigerian workers in the company, saying: “As for the Nigeria workers, they have terms of employment that is binding on both them and the management. This will be binding on the new owners as well. If there’s going to be any change, it will have to be re-negotiated.”
Addax Petroleum is an international oil and gas exploration and production company with a strategic focus on West Africa and the Middle East. Addax Petroleum is one of the largest independent oil producers in West Africa. Addax holds assets in Nigeria, Cameroon, and Gabon with a combined 538 million barrels of proven and probable oil reserves as of the end of last year. Its crude output stood at 134,700 barrels per day in the first quarter of this year.