China National Petroleum Corp (CNPC), the country's largest oil and gas producer, has agreed to buy Canada's Verenex Energy Inc for C$499 million ($390 million) in a bid to boost its business in Africa.

CNPC's international arm, CNPC International Ltd, has offered to take over Verenex for C$10 ($7.8) per share, a 28 percent premium to the company's recent share price, Verenex said on its website.

The Calgary-based Verenex's biggest asset is its 50-percent stake in the Area 47 oilfield in northwest Libya in northern Africa, along with other assets in the vicinity.

CNPC's offer still has to be approved by the Libyan National Oil Corp and Verenex shareholders owning at least two thirds of the outstanding shares, according to the Canadian company.

A spokesman with CNPC yesterday declined to comment on the deal, and the company posted no statement about the transaction on its website.

The deal is the latest among the overseas development plans of China's oil and gas companies.

"Now the timing is good for Chinese companies to make overseas investments," said Lin Boqiang, an energy professor at Xiamen University. "Prices of some oil and gas assets have dropped because of the low oil prices."

CNPC General Manager Jiang Jiemin had earlier said the company was studying the feasibility of acquiring some overseas resources companies badly affected by the global financial crisis.

"The present low share prices of some global resources companies offer good opportunities for us," he had said.

More deals likely

Domestic media reported earlier that China's largest oil refiner Sinopec was in talks to buy the 20 percent stake held by Spanish construction company Sacyr Vallehermoso in oil and gas firm Repsol YPF.

Sinopec is looking to buy the stake at 26.7 euros per share, a near 60 percent premium to its market price at present.

The company is also seeking to acquire Russia-focused firm Urals Energy, domestic media reported.

According to a three-year plan for China's oil and gas industry made by the National Energy Administration, China is considering setting up a fund to support firms in their pursuit of foreign mergers and acquisitions.

The plan was submitted at the National Work Conference on Energy held in Beijing earlier in February.

Fang Shangpu, deputy director of the State Administration of Foreign Exchange, said in February that more measures would be introduced to support firms seeking to expand overseas.

Source:China Daily