Deal Insight

Sinopec acquires 30% stake in Galp's Brazilian subsidiary with a US$5.2 billion capital injection

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11 November 2011

Sinopec acquires 30% stake in Galp's Brazilian subsidiary with a US$5.2 billion capital injection

Report summary

Sinopec is to acquire a 30% stake in Galp Energia's Brazilian subsidiary, Petrogal Brasil. The transaction is a capital increase, rather than a 'clean' acquisition. The structure of the deal is analogous to Sinopec's 2010 purchase of a 40% stake in Repsol Brasil. In total, Sinopec will inject US$5.18 billion of cash. Accounting for balance sheet impacts, the effective acquisition cost is US$3.74 billion.We value a 30% stake in Galp's Brazilian portfolio at US$2.2 billion ...

Table of contents

  • Executive summary
  • Transaction details
    • Santos Basin pre-salt cluster
    • Technical resources
    • Other basins
    • Upside analysis
      • Commercial assets
      • Technical resource base
      • Exploration potential
    • Precedent transaction analysis
    • Sinopec
    • Galp Energia
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 8 images and tables including:

  • Deal analysis: Table 1
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Upstream assets: Table 1
  • Wood Mackenzie base production and capex forecasts (30% of Petrogal Brasil)
  • Inferred breakdown of value (commercial vs. upside) at base and high oil price scenarios
  • Per barrel resource acquisition costs vs. WoodMac NPV per boe estimates
  • Galp Energia indexed share price performance post deal announcement

What's included

This report contains:

  • Document

    Sinopec acquires 30% stake in Galp's Brazilian subsidiary with a US$5.2 billion capital injection

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