June 24, 2009
There has been a scramble for oil assets in Iraq's Kurdish region, which is more open to foreign investment than Baghdad. Heritage Oil, also a London listed explorer, agreed to buy Addax's partner in Kurdistan, Turkey's Genel Energy, for £1.5bn earlier this month.
Addax and Genel both produce oil at Taq Taq, with the intention of increasing its production from 40,000 barrels a day to a peak production of 180,000 barrels a day.
Sinopec's offer represents a 47pc premium to the closing price on June 5, the day before Addax announced it was in preliminary discussions with Sinopec and others about a potential deal. Its shares rose 282, or 12pc, to £26.50 in London
The offer from the cash-rich Sinopec, an abbreviation of the China Petrochemical Corporation, does not rely on outside financing. It will have to pay a termination fee of C$300m if it withdraws from the acquisition, which needs the approval of the Chinese government by the end of August.
Jean Claude Gandur, chief executive of Addax, said he hoped Sinopec would increase investment in the business and accelerate exploration plans.
"We are pleased that Sinopec has recognised the highly attractive asset portfolio and exceptional team that we have assembled at Addax Petroleum," he said.
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