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updated: 3/15/2013 6:46 AM

Italy's ENI sells Africa gas stake to China

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Associated Press

BEIJING -- Italian oil producer ENI says it has sold a 20 percent stake in a gas field in Mozambique in southern Africa to China's biggest state-owned energy company for $4.2 billion.

The sale announced Thursday to PetroChina Ltd. adds to a string of foreign acquisitions by Chinese mining and energy companies as they try to become global competitors.

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ENI S.p.A., headquartered in Milan, said it will retain 50 percent of the Area 4 field while three other partners each will own 10 percent.

The Italian company said it also signed an agreement with PetroChina, a unit of China National Petroleum Corp., to jointly study development of a shale gas block in southwestern China.

China's state-owned energy companies, flush with cash from the country's economic boom, are spending billions to acquire assets abroad in hopes of profiting from future demand.

Acquisitions so far this year total $7 billion, on top of last year's $34 billion and 2011's $17.1 billion, according to financial information company Dealogic Ltd.

Some are aimed at acquiring oil and gas to import to China, the world's biggest energy consumer. But companies also are investing in assets in Africa and Latin America that supply North America and Europe.

ENI has described Area 4 in Mozambique as one of the biggest gas discoveries of the past decade.

The deal also gives the Italian company a foothold in China's growing shale gas industry.

The Rongchang block that ENI and PetroChina will study "has proven to be the most promising in the country," the Italian company said.

China's government is promoting shale gas exploration in hopes of curbing rising dependence on imported oil and gas.

Its companies control access to promising fields but lack the advanced technology needed to extract shale gas. So they are forging partnerships with global energy companies that supply know-how.

China's No. 2 state-owned energy producer, Sinopec Ltd., announced a partnership in December with U.S. oil giant ConocoPhilips Co. to explore for shale gas in a different portion of the Sichuan basin.

In December, PetroChina agreed to invest $2.2 billion for a 49.9 percent stake in a Canadian shale gas field being developed by Encana Corp.

Last month, another Chinese state-owned oil producer, CNOOC Ltd., completed a $15.1 billion acquisition of Canadian energy producer Nexen. It was Canada's biggest overseas energy deal to date.

Calgary-based Nexen also operates in western Canada, the North Sea, Africa and the Middle East.

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