China’s Sinopec International Petroleum Exploration and Production Corp. (SIPC).  has  made a deal  to buy  Calgary-based  Addax Petroleum for about C$8.27 billion (US$7.24 billion) as  China continues to secure overseas energy assets to fuel its economy.

A state-controlled  subsidiary of China Petrochemical Corp.,  Sinopec   will pay  C$52.80 per share,  bidding out  Korea National Oil Co (KNOC)  for Addax's prospective oil blocks in West Africa and Iraq's semi-autonomous Kurdish region. Sinopec will acquire all of Addax’s  outstanding common shares.

The bid price  is  47 percent  higher than  Addax's share price on June 5, before the media reported  the negotiations,  the companies said.

Although  the deal is still subject to regulatory approval,  the Addax board  has unanimously approved it.  Part of the deal is the sale of the shares held by  its chief executive and other senior officers .

"We are pleased that Sinopec has recognized the highly attractive asset portfolio and exceptional team that we have assembled at Addax Petroleum," chief executive Jean Claude Gandur said in a statement.

"The efforts and accomplishments that Addax Petroleum has achieved thus far will be built on through increased investment in the business and acceleration of development and exploration plans."

Both companies issued press releases to announce  the deal.

The Sinopec Group is China's largest producer and supplier of oil products and major petrochemical products.

According to Addax Petroleum's public  records, the company has 536 million barrels of proved and probable oil reserves as  of  31 December 2008 and  had an average production of approximately 140,000 barrels of oil per day (equivalent to 7 million tons per year) in 2008.

SIPC is committed to corporate social responsibility and  plans to retain all Addax Petroleum's existing management and employees. 

(US$1=$1.143 Canadian)