Sinopec buys majority stake in Australian oil producer

China Petroleum & Chemical Corp (Sinopec)<600028><386>, the nation's largest oil refiner, spent US$559 million in cash to buy a controlling stake of 60% in AED Oil Ltd's fully-owned assets, with an aim to boost its production in Australia, according to AED's statement to the Australian Stock Exchange today.

The deal values AED's assets, which includes the Puffin and Talbot oil fields in northwest Australia, at approximately US$926 million, according to the statement. Sinopec, Asia's top oil refiner and a wholly-owned unit of China Petrochemical Corp, will take over as the operator of the joint venture.

AED, which spent about US$160 million buying the Puffin project, announced in January to sell the stake as it need more funds to pay off its debt.

The deal is still subject to regulatory approvals from the Chinese government and from the government of Australia's Northern Territory.