(AXC.L) Addax Petroleum Corporation Buy/Sell

By Luke Baker

BRUSSELS, Nov 10 (Reuters) - The president of Iraq's Kurdish region criticised the central government on Tuesday for its failure to draw up a clear law on sharing oil revenues and said the Kurds would hold on to what they earn for now.
Speaking during a visit to the European Parliament, Masoud Barzani said Kurdistan had the right to retain the income from the export of about 100,000 barrels of oil per day, despite a law stating that all Iraq's oil and gas assets are shared.
"The Iraqi oil ministry has failed ... in their laws and therefore we are not obliged to adhere to the oil laws of Iraq because they have failed in producing a much more transparent situation," Barzani told a news conference.
"Eight billion dollars has been used by the Iraqi oil ministry for development of oil production but unfortunately the level of production has dropped. Therefore we have no faith in that law that already exists," he said through a translator.

Iraq's central government and semi-autonomous Kurdistan have since 2004 engaged in a long-running dispute over Iraq's vast oil and gas assets and the growing revenue generated by them. The discord threatens to aggravate the political strains that already exist between autonomy-minded Kurds and Shi'ites.
According to Iraq's constitution, all the country's hydrocarbon assets are shared and there is a formula for distributing the income among regions, with the Kurdish region granted 17 percent of total oil revenues.
But Kurdistan, which occupies the top third of Iraq along the borders with Turkey, Iran and Syria, has been quicker to exploit the oil and gas assets that lie in its territory and is reluctant to give up the revenue they generate.
Foreign investors including Norway's DNO International and Toronto-listed Addax Petroleum have helped expand the region's oil production to 100,000 barrels a day, generating potential income of $2.9 billion a year at current oil prices of nearly $80 a barrel.
Barzani said on Tuesday output could increase tenfold to more than 1 million barrels a day by the end of 2011, bringing forward a previous forecast for that level of output in 2012. But the income would not be shared, he said.
"Until the disputed areas are resolved, we feel that the share of Kurdistan of 17 percent should go to the account of Kurdistan by itself and not be distributed by the finance (ministry) in Baghdad because often they use that as a weapon against us," Barzani said. "We believe it is our right."
While the Kurdish region moved rapidly after the U.S.-led invasion in 2003 to boost oil output, the central government is catching up, signing a series of development contracts with major international oil companies in recent months.
If all the deals in the pipeline come together in the coming years, Iraq is set to triple its total oil output to 7 million barrels per day, making it the world's largest producer after Russia and Saudi Arabia.

(Editing by Anthony Barker) Keywords: OIL IRAQ/KURDS (Brussels newsroom, +32 2 287 6830; email: brussels.newsroom@thomsonreuters.com)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.