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Sinopec on an acquisitions spree

State-owned China Petroleum & Chemical Corp. or Sinopec, in early January closed a multi-billion dollar U.S. shale deal, the most recent in a series of acquisitions the company has undertaken since early last year. Headed by Chairman Fu Chengyu, who was appointed chairman in April 2011, the company has also acquired stakes in a deepwater offshore field in the U.S. Gulf of Mexico and U.S. shale assets from Chesapeake Energy. Sinopec has been buying oil and natural gas assets, as well as unconventional resources like shale gas with the aim of reducing Sinopec’s reliance on refining. Under Fu’s leadership, Sinopec has acquired shale assets in North America and conventional oil assets in Iraq, Cameroon and West Africa. The investment firm Dealogic said Sinopec spent US$19.7 billion on acquisitions in 2011, which included the biggest Chinese outbound deal last year – the US$5.19 billion acquisition of Portugal’s Galp Energia SA’s Brazilian assets. Sinopec posted a profit in the first half of the 2011 fiscal year, but the refining unit incurred operating losses because of China’s control over fuel prices. (January 4, 2012)