Workers update a sign displaying gasoline and diesel prices at a Sinopec gas station in Yichang, Hubei province. [Photo/China Daily]

Deal gives energy giant 49% share in Canadian firm's UK subsidiary

China Petrochemical Corp, or Sinopec Group, said on Tuesday it had acquired a 49 percent stake in the UK subsidiary of the Canada-based Talisman Energy Inc for $1.5 billion, marking the first direct investment by a Chinese company in the North Sea.

The transaction came as the entry of China's largest refiner into the oil and gas business in the North Sea region and is also the largest UK-focused deal in the energy sector this year, according to Sinopec.

The company said the two parties will strengthen their cooperation to explore resource potential and accelerate the evaluation and commercial development of these assets.

"Sinopec is well positioned to increase the production capacity of the mature oil fields, while Talisman has ample project experience in the North Sea," the company said. "It will be a mutually beneficial cooperation."

Talisman's UK subsidiary is headquartered in Aberdeen, United Kingdom, and has interests in 51 North Sea oil and gas fields.

It has remaining proved plus probable reserves of 489 million barrels of oil equivalent, of which 95 percent is crude oil.

In 2011, the company's daily oil and gas output reached 71,000 barrels.

After the completion of the deal, Talisman will continue to hold 51 percent of the joint venture, but Talisman Energy UK Ltd will be renamed Talisman Sinopec Energy UK Ltd. Meanwhile, Sinopec will send employees to take part in the new company's management. Hal Kvisle Talisman President said the transaction supports a number of Talisman's key priorities and will give it the financial flexibility to invest in future opportunities.