PetroChina buys Keppel stake in SPC for $1 billion

By Harry Suhartono

SINGAPORE (Reuters) - Asia's largest oil and gas producer PetroChina (0857.HK) is buying Keppel Corp's (KPLM.SI) 45.5 percent stake in Singapore Petroleum Company (SPC) for S$1.47 billion ($1.02 billion) and plans to make a general offer to buy the rest of the firm.

SPC's main asset is a refinery in Singapore, Asia's oil trading and pricing hub, and so the acquisition may give PetroChina (601857.SS) more leverage and flexibility in oil trading.

It is the first overseas acquisition of a public company by PetroChina, and the move for downstream fuel production adds to efforts by Chinese oil majors to buy upstream oil exploration assets around the world to secure energy supplies.

"SPC will become a new platform for the implementation of our international strategy and will provide a broader foundation and stable path for development," PetroChina said in a statement.

The deal valued the Singapore oil refiner at S$3.2 billion or a 24 percent premium to its market value of S$2.6 billion according to Reuters data. It was an equivalent of S$6.25 for each SPC share, compared to Friday's closing price of S$5.04.

The deal still needs regulatory approval, including from the Chinese government. Under Singapore rules, since PetroChina is buying more than 30 percent of the company it would need to make an offer for the rest.

Keppel, the world's largest offshore oil rig builder, said in the statement that together with PetroChina it plans to explore opportunities in the offshore oil industry and in other areas.

"The divestment of our stake in SPC would enable Keppel to seize opportunities," Keppel's chief executive officer Choo Chiau Beng said.