US duo lead on Sinopec's $3.1bn purchase of Apache Egypt stake

Vinson & Elkins and Weil Gotshal & Manges have advised on Sinopec’s purchase of a 33% stake in the Egyptian oil and gas business of American energy corporation Apache, for $3.1bn (£1.99bn).

The transaction, which is still subject to approval, saw Sinopec’s subsidiary Sinopec International Petroleum Exploration and Production Corporation (SIPC) acquire the Egyptian assets after entering into a strategic partnership with the Texas-based company to pursue joint, upstream oil and gas projects.

As of December 2012, Apache’s Egypt operations, located in the country’s West Desert, contained 641m barrels of oil and 3.79tr cubic feet of gas, with gross production averaged at 213,000 barrels of oil and 363,000 equivalent barrels of gas per day.

The investment gives Hong Kong-listed Sinopec access to the upstream oil and gas sector in Egypt for the first time, contributing an additional 130,000 barrels of oil per day to its production and expanding its international upstream portfolio.

US firm Vinson represented Sinopec on the deal, with a team led by the firm’s vice head of the China practice David Blumental, alongside Beijing partner and former managing partner of that office Rob Patterson. The head of V&E’s China practice, Hong Kong-based Xiao Yong also provided support.

Weil Gotshal acted for Apache, with a group led by corporate partner Steven Xiang in Beijing. Assistance was provided by commercial partner Suat Eng Seah in Shanghai, M&A partner Glenn West in Dallas and tax partner Jared Rusman, also in Dallas.

Sinopec has long been investing in oil and gas assets around the world in a bid to expand China’s marketshare of the global energy market.

Earlier this year, the Beijing-headquartered petroleum giant also acquired Marathon Oil Corporations’s 10% stake in an Angola oil and gas field for $1.52bn (£985m).

On the latter deal, Sinopec handled legal matters in-house.

For more, see: Vinson China co-head to relocate to HK in wake of Shanghai closure.