(AXC.L) Addax Petroleum Corporation Buy/Sell

BEIJING, Oct 27 (Reuters) - Outbound investments by Chinese firms rose 0.5 percent in January through September compared with a year earlier, helped by a near tripling in outflows in the third quarter alone, the Commerce Ministry said on Tuesday.
Non-financial outbound foreign direct investments amounted to $32.9 billion in the first nine months of this year, the ministry said, with $20.5 billion of that coming in the third quarter.
The July-September figure marked a 190.4 percent increase from the same period a year earlier, the ministry said.
Nearly 44 percent of the investments so far this year were in the form of acquisitions, primarily in the mining and manufacturing sectors, the ministry added.
It did not provide further details, but said a range of measures, including more clear rules on outbound investments and an official "Going Out" policy, were helping to underpin the rising tide of such flows.
Chinese companies have long sought to expand their footprints overseas, particularly in areas such as resources, but have sometimes seen those plans thwarted by political resistance in the target country.
Beijing has now started to encourage a more proactive approach, with some officials saying that firms now face good opportunities for investing overseas due to lower asset prices and a loosening of investment rules in many countries.
Major acquisitions so far this year include a deal struck in June by Sinopec, the country's largest oil refiner, to buy Swiss oil explorer Addax for $7.24 billion.
Scouring the globe for resources, Chinese firms have also stepped up their investments in Australian resources.
Overall outbound Chinese investments totalled $55.91 billion last year, an increase of 111 percent from 2007.
Of that, non-financial investments rose 75 percent to $41.86 billion, while financial investments rose roughly eight-fold to $14.05 billion.

(Reporting by Jason Subler; Editing by Victoria Main)

((jason.subler@thomsonreuters.com; +8610 6627 1215; Reuters Messaging: jason.subler.reuters.com@reuters.net)) Keywords: CHINA ECONOMY/INVESTMENT (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

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By Cho Mee-young and Michael Erman

SEOUL/NEW YORK, Oct 22 (Reuters) - South Korea ended a losing streak in overseas resource deals with the C$1.8 billion ($1.7 billion) friendly takeover of Canada's Harvest Energy Trust, securing oil and gas reserves as well as a refinery that Harvest could not afford to expand.
In the latest in a series of acquisitions of Canadian assets by Asian state companies, Korea National Oil Corp will pay C$10 a trust unit for Harvest and assume C$2.3 billion of long-term debt.
The bid represented a 37 percent premium over Wednesday's price for Harvest, which produces 53,400 barrels of oil equivalent a day in Western Canada and operates the 115,000 barrel a day Come By Chance refinery in Newfoundland and Labrador on Canada's Atlantic coast.
Harvest had planned a C$2 billion expansion of that plant, but shelved it last year due to the credit crunch.
Its units have lagged those of its rivals because of its debt load, undercapitalized assets and volatile cash flow from the refinery, UBS analyst Travis Wood said.
Harvest units surged C$2.45, or 33 percent, to C$9.75 on the Toronto Stock Exchange on Thursday morning, a price that suggests investors see slim odds of a counter bid.

It is South Korea's biggest overseas energy deal, and it will bring the world's No. 5 oil importer a few steps closer to its goal of producing the equivalent of 18.1 percent of its oil and gas needs by 2012. More might be on tap.
"KNOC is likely to acquire one more oil company within this year," Kim Jung-gwan, deputy minister at the Korea Ministry of Knowledge Economy, said in a press briefing.
Seoul was late to the resource acquisition race but hopes to capitalize on the recession to pick up assets cheaply.
Analysts said the financials on the Harvest deal looked positive for KNOC on a per-barrel basis.

"Although we have to take a closer look at reserve quality and production costs, the price seems reasonable, as Canada has no political risks in developments and the market usually considers around $13 a barrel an appropriate average price for such deals," said Jae-joong Kim, an analyst at Woori Investment & Securities. "This deal shows KNOC seems quite aggressive."
Based on the total equity plus debt value of the deal and Harvest's 219.9 million barrels of proved onshore oil and gas reserves, mostly in the western province of Alberta, the deal works out to about $18 per barrel equivalent.
KNOC will raise $1.65 billion in domestic and overseas markets by additional borrowing to finance the deal, while the remainder would be paid by the company's current capital.
"We expect both buying overseas oil fields and seeking (mergers and acquisitions) will accelerate as we have secured the base in Calgary, Canada, the center of North American oil development business," the Korean government statement said.
KNOC, which will be able to produce 120,000 bpd of oil after the deal, is set to reach its capacity target of 300,000 barrels earlier than planned in 2012, industry experts said, as the company is in talks with another four to five companies.

The deal is subject to court and regulatory approvals, and the support of Harvest unitholders. Harvest's board said it will vote the 7 million units it holds in favor of the deal. Harvest has 180.6 million units outstanding, according to Reuters data.
KNOC had narrowly lost out to Chinese oil giant Sinopec in a bid for Swiss-based oil explorer Addax Petroleum Corp this summer.
The company made an earlier foray into Canada in 2006, buying an oil sands property from U.S. gold producer Newmont Mining Corp for $270 million.
In February, KNOC paid half of the $900 million price tag for a 50 percent stake in Petro-Tech, owned by private U.S. firm Offshore International Group.

($1=$1.04 Canadian)

(Additional reporting by Jeffrey Jones; editing by Jonathan Leff and Rob Wilson)

((meeyoung.cho@thomsonreuters.com; +82 2 3704 5653; Reuters Messaging: meeyoung.cho.reuters.com@reuters.net)) Keywords: KNOC HARVEST/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

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BEIJING/LONDON, Oct 16 (Reuters) - China's Sinopec Group is trying to communicate with Baghdad as its qualification to participate in Iraq's second round of bidding for major oil deals is in question, a company official and media reported.
A top Iraqi official said early this month that Iraq has barred the Chinese state oil firm from new oil talks over its purchase of Swiss firm Addax that is active in Iraq's semi-autonomous Kurdistan region.
"Our people were communicating with the Iraqi side. I've heard no results so far," Huang Wensheng, Sinopec's spokesman, told Reuters on Thursday.
"We are still actively preparing for the second round of bidding. We value highly this opportunity and want to contribute to Iraq's post-war rebuild," Zhou Yuqi, head of Sinopec's overseas exploration and production unit, was quoted as saying by Caijing magazine on Friday.
Sinopec has already missed out on one big opportunity to be part of the consortium to develop the giant Zubair oilfield, which the Iraqi oil ministry awarded earlier this week to Italy's oil, gas firm ENI.

"Sinopec is not any more part of the original consortium," ENI's Chief Executive Paulo Scaroni told Reuters this week. "The government asked us to exclude them considering their involvement in kurdistan."
Zubair, one of the largest Iraqi oilfields, produces 195,000 barrels per day and expects to reach a plateau of 1.125 million bpd under a seven-year development plan that would cost some $10 billion, ENI has said.

Iraq's oil ministry had been waiting for an explanation from Sinopec about its dealings with Addax, which has been pumping oil from Kurdistan's Taq Taq field, Abudul-Mahdy al-Ameedi, deputy director of Iraq's contracts and licensing has said.
Sinopec took part in the ministry's first oil bidding round, which landed only one deal, giving BP and China's top energy group CNPC a contract to develop the giant Rumaila field.
For Sinopec to get back to the talks, it may need Beijing's involvement, said a western oil executive involved in the bidding process.
"They (Sinopec) are hoping to resolve the issue before any subsequent bid rounds," the oil executive said.
"The situation is not that bad for them. It's easier for this to be resolved through government-to-government talks than it would be if it was a company. And as things stand, the Chinese have a stake now in both the Kurdish region and the south through other companies."

(Reporting by Chen Aizhu in Beijing, Tom Bergin in London and Simon Webb in Dubai; editing by James Jukwey)

((aizhu.chen@thomsonreuters.com; Reuters Messaging: aizhu.chen.reuters.com@reuters.net; +8610 6627 1211)) Keywords: SINOPEC IRAQ/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

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SEOUL, Oct 9 (Reuters) - State-run Korea National Oil Corp (KNOC) said on Friday it was eyeing five to ten oil companies overseas, each producing 50,000-100,000 barrels per day, for a possible acquisition "soon".
"We will make an acquisition soon," KNOC CEO Kang Young-won said in a parliamentary audit, without elaborating.
A KNOC statement submitted to the parliamentary audit said for such acquisition, KNOC had been in talks with management teams, conducted asset due-diligence and submitted preliminary proposals.
Kang also said KNOC and its partners would complete raising 1 trillion won ($860 million) in funds overseas by end-October, which would help ease any concerns about the financial impact of its investments.
South Korea, the world's No.5 crude oil importer, said last year it would invest 19 trillion won in KNOC to help the firm raise daily production capacity six times to 300,000 barrels by 2012.
KNOC said in the statement it was currently producing about 72,000 bpd from a total of 10 domestic and overseas oil fields.
The statement said KNOC considered this year to be the right time for acquisitions as global stock markets had weakened due to the financial crisis.
KNOC had prioritized regions in the order of Middle East, central Asia, South America, Australia and other Asian countries, Russia and Western Africa, it said.
In February, KNOC agreed to pay half of the $900 million price tag for a 50 percent stake in Petro-Tech, owned by private U.S. firm Offshore International Group, which has shallow-water offshore blocks in Peru covering more than 5 million acres.
KNOC also pursued a bid for Swiss oil explorer Addax Petroleum Corp. but was trumped by Sinopec, China's top oil refiner, which agreed to buy Addax in June for $7.24 billion.
The KNOC statement said South Korea had a total of 168 million barrels of oil stocks, equivalent to consumption for 175 days, at end-August. Of the total, which excluded 38.7 million barrels of international cooperative oil stocks, the government held 82 million barrels through KNOC, and the remainder was held by private firms.
The Korean government will buy about 19 million barrels more by 2013 to meet its target of holding 101 million barrels of oil stocks by the year, the statement said.
The government, which has facilities to stockpile a maximum of 139 million barrels of oil at nine domestic sites, plans to expand its storage capacity to 146 million barrel by 2011 under a three-step national oil reserve plan running from 1980 through 2011.

($1=1163.0 Won)

(Reporting by Cho Meeyoung; Editing by Lincoln Feast and Muralikumar Anantharaman)

((meeyoung.cho@thomsonreuters.com; +82 2 3704 5653; Reuters Messaging: meeyoung.cho.reuters.com@reuters.net)) Keywords: KNOC AUDIT/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

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