CNOOC/Sinopec lead race for Marathon Angola stake-source

http://www.reuters.com/article/americasMergersNews/idUSHKG33970620081002?sp=true


HONG KONG, Oct 2 (Reuters) - Chinese oil firms Sinopec Group and CNOOC Ltd (0883.HK: Quote, Profile, Research, Stock Buzz) are closing in on buying an Angolan oil field stake being sold by U.S. energy firm Marathon Oil (MRO.N: Quote, Profile, Research, Stock Buzz), a source with knowledge of the bidding said on Thursday.

"(The two companies) are probably preferred bidders," the source said.

The sale appeared to have stalled about a month ago after Marathon demanded upwards of $2 billion for the 20 percent stake in Angolan Block 32, but it was now being more "realistic" and would accept less than $1.8 billion, the source said.

"It's probably slightly below that price after factoring in all the adjustments."

The source said there was a good chance of a deal, but some key issues remained to be resolved.

"It's way too premature to assume it's a done deal. The deal is progressing but it's definitely not at that stage."



The stake in the offshore block had attracted bids from India's ONGC (ONGC.BO: Quote, Profile, Research, Stock Buzz) and Brazil's Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz) as well as the Chinese pair.

Marathon and Harrison Lovegrove, the consultancy running the sale of the stake, have both declined to comment on the process.

Marathon has a plan to raise cash by selling assets worth $2-$4 billion in the next year, but that target could be in jeopardy if it can't clinch a sale of the Angolan stake.

Marathon Oil holds 30 percent of Block 32 and was looking to cut its stake to 10 percent, the same as it holds in Angola's Block 31, which the government approved for development in July.

The remaining interests are held by operator Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), with 30 percent, Sonangol with 20 percent, Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) with 15 percent and Petrogal with 5 percent.

Angola now produces almost 2 million barrels of oil per day, rivalling Nigeria as Africa's top oil producer. It is the biggest oil supplier to China and the sixth-biggest to the United States. Oil accounts for about 90 percent of Angola's exports.

Its mostly offshore reserves total about 11.4 billion proven barrels, about the same as Algeria, according to estimates by Edinburgh-based energy consulting firm Wood Mackenzie.