GDF Suez has unveiled a “far-reaching alliance” with China Investment Corp. (CIC) that includes the acquisition of a 30% stake in GDF Suez’s oil and gas exploration and production business for €2.3 billion and purchase of a 10% stake in its LNG Atlantic liquefaction plant in Trinidad and Tobago for €600 million.
“Our investment of 30% in GDF Suez E&P would be our first sizeable transaction in Europe to date and, together with Atlantic LNG, one of our most important investments worldwide,” said CIC Chairman and Chief Executive Lu Jiwei, whose firm sees “a wealth of attractive joint investment opportunities” with GDF Suez.
GDF Suez E&P has 2P reserves of 815 MMboe at yearend 2010 and production of 51 MMboe in 2010 and a significant portfolio of contingent resources and exploration prospects.
With more than 1,500 employees in 13 countries, GDF Suez E&P generated €2.2 billion of revenues in 2010.
The two agreements are part of a much wider memorandum of understanding between the two firms that calls for cooperation across multiple businesses and regions, they said, drawing particular attention to Asia Pacific.
They said the MOU will be deployed across GDF Suez Group’s businesses—which include gas, power, water and waste, and energy efficiency services—and sets up the framework for cooperation in three areas.
The named the three areas as joint investment opportunities in existing and new energy-related projects in Asia Pacific; financing cooperation in new projects in Asia Pacific; and commercial sponsorship and support to GDF Suez in Asia Pacific region, including China, by CIC’s affiliates.
The MOU will be administered through a steering committee chaired by the two groups’ respective chief executives.
The firms said the transaction, which could be finalized by yearend 2011, will be subject to “condition precedents being satisfied and will be presented for consultation to GDF Suez’s employee representative bodies.”
Last month, GDF Suez acquired an additional 20% share in the offshore Njord field and in Noatun discovery in Norway from ExxonMobil E&P Norway AS. The acquisition made GDF Suez E&P Norge AS the lead investor in the license with a 40% interest, alongside operator Statoil 20%; E.On Ruhrgas 30%; Faroe Petroleum 7.5%, and VNG 2.5%.
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