Sinopec going after Nigerian oil

Deal with Total to jumpstart Sinopec’s African expansion.

Industry sources said China Petroleum & Chemical Corporation or Sinopec Ltd. has signed a preliminary US$2.4 billion deal to purchase onshore oil blocks in Nigeria owned by French firm Total S.A., one of the world’s six supermajor oil companies.

They said the potential upstream asset acquisition in Nigeria could help Sinopec replenish its dwindling oil reserves and improve the firm's overall profit margin amid sustained high oil prices in the long term.

Sinopec is looking to African reserves where government control is less strict compared to North America and Europe. Sinopec had crude oil reserves of around 2.8 billion barrels last year, down from 3.3 billion barrels in 2007.

Energy companies backed by the Chinese government are looking for oil and natural gas reserves to help fuel the energy-hungry economy.