A unit of China Petrochemical Corp (Sinopec) will pay $2.1 billion to purchase Canadian oil and gas explorer Daylight Energy Ltd.
Chinese companies see a down stock market and see that as an opportunity to make deals. A combination of falling oil prices and debt levels has hit Canadian oil and gas shares in recent months as investors fret that growth prospects are shriveling.
Sinopec International Petroleum Exploration and Production Corp (SIPC) agreed to buy Calgary, Alberta-based Daylight a natural gas company. China would like to export liquefied natural gas from western Canada, one industry official said.
Sinopec Group “will further expand its portfolio in Canada as it advances its international businesses,” the company said.
China’s big state-owned firms have aggressively moved to buy overseas assets. State energy firms in particular have the responsibility to secure enough natural resources to satisfy growing demand in the world’s biggest energy consumer.
China’s outbound deals in energy and mining so far this year total $26 billion, compared with $32.3 billion in the same period last year, according to Thomson Reuters data.
In July, China’s top offshore oil producer, CNOOC Ltd agreed to buy struggling Opti Canada Inc for $34 million and $2 billion in debt and late last month, China’s Minmetals Resources Ltd agreed to buy Africa-focused copper miner Anvil Mining for $1.28 billion.