China Petroleum & Chemical Corp. (NYSE:SNP), known as Sinopec, recently agreed to buy a 20 percent stake in a Nigerian oil field from Total, SA (NYSE:TOT) for $2.5 billion. The purchase is part of Sinopec's ongoing plan to aggressively add to its overseas assets, while the deal for Total represents the continuation of its recent strategy to shift its asset mix with more frequent adjustments to its business portfolio. The deal for the portion of the Nigerian field contains part of the Usan field, a field which started production early this year, and the block which Sinopec purchased produces 130,000 barrels a day of oil equivalent.

Nigeria is the largest crude oil producer in Africa, but the country has been plagued by frequent violent attacks from rebel groups on oil company equipment and personnel. In addition, problems stemming from natural events such as severe flooding have compounded the difficulties of operating there. Recent floods have caused lower oil production despite the rich reserves. Sinopec, however, has been eagerly adding foreign assets, including some from the US as it extends its reach to become a truly global company. Although Nigeria's National Petroleum Corp. holds the rights to the oil block purchased by Sinopec, designated as OML 138, Sinopec joins other partners such as Chevron Nigeria (NYSE:CVX), Exxon affiliate Esso Nigeria (NYSE:XOM), and Nexen Petroleum (NYSE:NXY) with interests in the block.

Sinopec's Other Moves

Sinopec, the dominant refining company in China, is attempting to diversify its interests to include more exploration and production to round out its asset base. Earlier this year, Sinopec purchased Canadian natural gas and oil producer Daylight Energy for approximately $2.1 billion. Sinopec also invested $5.2 billion in Portuguese company Galp Energia's Brazilian Petrogas Brasil interests. Sinopec also purchased a $1.5 billion, 49 percent stake in Talisman Energy (NYSE:TLM), another Canadian exploration company, in July. The deal was expected to be completed by year's end.The Talisman Energy assets are largely oil and liquids production in the North Sea, but there are also Southeast Asian assets in the deal as well. A further $2.2 billion joint venture for a 30 percent interest in five shale plays of US company Devon Energy (NYSE:DVN) shows the outreach of some of Sinopec's acquisitions.

China's Energy Expansion

The other Chinese majors, PetroChina (NYSE:PTR) and CNOOC (NYSE:CEO), have also been active across the globe. The strategy of acquiring overseas assets hasn't been simply a one company approach or a corporate strategy, but is part of a wider strategy of Beijing's policymakers which the oil companies are carrying out. China is a massive consumer of oil and energy products, and despite the amount of production domestically, with many of its own oil fields already mature, it needs to continue to pursue an overseas thrust.

CNOOC is currently in the process of trying to purchase Canadian company, Nexen Energy, a deal which has seen some opposition by Canada's government. Recent concessions to the Alberta Premier, Alison Redford, may have ironed out the final wrinkles in what would be a $15 billion purchase. The three China oil majors have found Canada, with its oil sands and its natural gas fields, an attractive place for joint ventures, partnerships and alliances. Not all has gone smoothly, however, as in addition to the CNOOC-Nexen deal holdups, PetroChina and Encana (NYSE: ECA) eventually failed to reach terms on what would have been a $5.5 billion partnership on shale gas in western Canada. But the allure of attractive assets and willing partners or sellers will continue to bring the already hunting Chinese majors into the foreground.

Sinopec Eyes More

Earlier in the year, Sinopec was reportedly interested in dealing for what might be as much as $10 billion of Chesapeake Energy's (NYSE:CHK) assets.The speculation was due in part to Sinopec's deal with Devon and its shale plays, as Chesapeake was apparently in the market for heavy divestiture, while Chesapeake shale plays would complement Sinopec's Devon stakes. But Sinopec keeps moving, regardless of the outcome of the deals. Sinopec, along with others, has been interested in French oil and gas explorer Maurel & Prom, which apparently is seeking either a partner or to be acquired a larger company. Sinopec continues to be on the alert around the globe for assets that can both benefit its bottom line and bring more energy to China.