CNOOC, Sinopec sign $1.3 billion deal for Angola block

Marathon International Petroleum Angola Block 32 signed a $1.3 billion definitive agreement with CNOOC International and Sinopec International Petroleum E&P under which CNOOC and Sinopec will acquire Marathon’s undivided 20% participating interest in the production-sharing contract and joint-operating agreement in Block 32 off Angola.

July 20, 2009

2 min read

By OGJ editors
HOUSTON, July 20 -- Marathon Oil Corp. subsidiary Marathon International Petroleum Angola Block 32 Ltd. signed a $1.3 billion definitive agreement with CNOOC International Ltd. and Sinopec International Petroleum Exploration & Production Corp. under which CNOOC and Sinopec will acquire the Marathon unit’s undivided 20% participating interest in the production-sharing contract and joint-operating agreement in Block 32 off Angola.

The transaction total excluded any purchase price adjustments at closing and has an effective date of Jan. 1, 2009. Marathon will retain a 10% working interest in the block.

The companies expect to close the transaction by yearend, subject to government and regulatory approvals. For transfer of working interests in Angola, the concessionaire and the other Block 32 partners have rights of first refusal.

“With the divestiture of a portion of our Angola interest, we are able to bring better balance to our overall portfolio by capturing the sizable amount of value we have created and redeploying capital into other growth regions for the company,” said David E. Roberts Jr., Marathon executive vice-president, upstream. “At the same time, maintaining a 10% interest in both Blocks 31 and 32 provides Marathon with exposure to this important resource base,” Roberts said.

Angola state-owned oil firm Sonangol serves as concessionaire of Block 32. Block operator Total E&P Angola (Block 32) Ltd. holds 30% interest. Other partners are Sonangol P&P 20%, Esso E&P Angola (Block 32) 15%, and Petrogal 5%.