Sinopec buys 49% equity interest in Talisman Energy UK North Sea assets for $1.5B
23 July 2012
Sinopec International Petroleum Exploration and Production Corporation (Sinopec) will acquire a 49% equity interest in Talisman Energy’s UK North Sea business, Talisman Energy (UK) Limited (TEUK), for $1.5 billion.
The deal structure will be a corporate joint venture whereby Sinopec will buy 49% of the shares of TEUK for $1.5 billion, with adjustments for working capital. This will proportionately reduce Talisman’s share of capital spending, production and abandonment liabilities for its UK business. The effective date of the sale is 1 January 2012, and the transaction is expected to close by the end of this year, subject to government and regulatory approval.
The joint venture plans to invest to improve ongoing operating performance, as well as infill drilling, exploration opportunities and major projects, thereby extending field life and deferring decommissioning.
TEUK will operate the assets, and Sinopec will appoint select personnel into key positions within the organization. TEUK is based in Aberdeen, Scotland. No reductions to TEUK personnel are expected as a result of this transaction.
Talisman entered the North Sea in 1994 and today holds operated and non-operated interests in 46 fields, and operates 11 offshore installations and an onshore terminal. The portfolio includes opportunities for infill wells, project developments and exploration.
Sinopec is a 100% subsidiary of Sinopec Group, which is China’s largest and one of the world’s largest integrated energy and petrochemical companies, with business scope across the entire oil & gas value chain. The operations cover exploration and development of resources, storage and transportation of oil and gas, refining and petrochemical production, and sales of refined products.
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