China National Petroleum Corp (CNPC), China's largest oil and gas company by production, and Malaysia's Petronas are in talks with Marathon Oil Corp. to purchase stakes in two of Marathon Oil Corp.'s offshore oil and gas fields located in Angola. Initial estimates of the deal indicate that it would involve at least US$6bn worth of oil and gas blocks.
If completed, this deal would represent the third major energy transaction in Africa this year by a Chinese state-owned enterprise. At last count, approximately US$16bn of oil and gas blocks were being sold internationally, with deals in Africa making up almost 69% (or US$4.11bn) of those transactions.
Buzz about the latest potential deal in oil and gas M&A foretells possibly another outstanding year in the oil and gas industry. Last year saw a record-breaking US$345.9bn in oil and gas mergers and acquisitions.
An expert in the energy field, Sanjeev Gupta (an Ernst & Young partner), indicates that Chinese enterprises normally are not daunted by the deal financing typically involved in such mega purchases, for they often have easy access to cheap government loans and other sources of state funding.