PetroChina has announced its purchase of a 45.5% stake in the Singapore Petroleum Company (SPC) for $1.02 billion (734.5 million). Asia's largest oil producer will buy its stake from oil shore rig builder Keppel, suggesting future plans to buy the remainder of SPC.
The move will be the first overseas acquisition by the state-owned Chinese oil majors, and signals a move for downstream fuel production to add to efforts PetroChina to buy upstream oil exploration assets around the world to secure energy supplies.
SPC currently own an oil refinery in Singapore which functions as Asia's oil trading and pricing hub, therefore PetroChina see the acquisition as an opportunity to gain further leverage and flexibility in oil trading.
The deal is still pending regulatory approval from both the Chinese and Singaporean authorities. Due to PetroChina buying more than 30% of the company it is required by Singaporean law to make an offer for the rest.