Tanganyika Gets $1.8 Billion Sinopec Takeover Offer

By Marianne Stigset and Winnie Zhu

Sept. 25 (Bloomberg) -- Tanganyika Oil Co., a Canadian oil and natural gas producer with operations in Syria and Egypt, said China Petrochemical Corp. made a takeover offer valuing the company at C$1.9 billion ($1.8 billion).

An offer for C$31.50 a share in cash was made by Sinopec International Petroleum Exploration and Production Corp., a wholly owned subsidiary of China Petrochemical, Tanganyika said in a statement to the Stockholm stock exchange today.

Chinese state oil companies are seeking energy assets overseas to meet rising demand from the world's fastest-growing major economy. Citic Resources Holdings Ltd., a unit of China's fourth-biggest oil producer, bought an oil field in Kazakhstan for $1 billion in June last year.

``The acquisition could be a big breakthrough for the Chinese oil giant in terms of its overseas expansion strategy,'' Wang Jing, an oil analyst with Orient Securities Co., said by telephone in Shanghai today. ``China should continue acquiring good overseas assets to safeguard energy supplies.''

Tanganyika's board unanimously recommends the offer, the company said in the statement. The shares rose 32.5 kronor, or 21 percent, to 186 kronor as of 9:52 a.m. in Stockholm trading. They closed at C$26 in Toronto yesterday.

The offer, at a 21 percent premium to yesterday's closing price, looks ``reasonable,'' Wang said.

Zhang Zhiguo, spokesman of China Petrochemical, also known as Sinopec Group, declined to comment when contacted by Bloomberg News. Sinopec Group is the parent of Hong Kong-listed China Petroleum & Chemical Corp.

African Operations

Tanganyika, partly owned by Sweden's Lundin family, takes its name from a former East African republic located by Lake Tanganyika, now part of Tanzania. The company was registered as Canadian Lynx Petroleum Ltd. until 1995.

The Vancouver-based company holds operating interests in two Syrian production-sharing agreements covering the Oudeh and Tishrine/Sheikh Mansour blocks.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net