Deal insight

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

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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 ...

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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Table of contents

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Strategic rationale
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 8 images and tables including:

Images

  • 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

Tables

  • Deal analysis: Table 1
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Upstream assets: Table 1

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