BOC contributes $800 million to $1.45 billion syndicated loan to Sonangol Sinopec International Limited to finance its cash calls and other amounts related to crude oil exploration and exploitation from three offshore fields (block 15, block 17, and block 18)

Project narrative

On July 2, 2004, Sinopec International Exploration and Production Corporation and Sonangol Asia Limited — a subsidiary of Sonangol (Angola’s state-owned oil company) — signed framework cooperation agreement. Under the terms of the agreement, Sonangol was granted the right to (re)purchase a 50% equity stake — held by Shell Development Angola B.V. (SDAN) — in an offshore oil field known as Block 18. Sonangol and Sinopec International Exploration and Production Corporation also agreed to jointly develop Blocks 15, 17, and 18. In December 2004, Shell Development Angola B.V. (SDAN) sold its 50% equity stake in Block 18 to Sonangol, leaving the remaining 50% ownership stake with BP. Then, on January 21, 2005, Sonangol agreed to transfer its 50% equity stake in Block 18 to Sonangol Sinopec International Limited (SSI) — a special purpose vehicle that was legally incorporated in the Cayman Islands on October 15, 2004 and a joint venture of Sinopec Overseas Oil & Gas Limited (SOOGL) and China Sonangol International Holding Limited (China Sonangol) — for an acquisition price of $421.5 million. SSI reportedly secured a loan from Standard Chartered Bank (with a corporate guarantee from Sinopec) to facilitate the $421.5 million acquisition. SOOGL held 55% of the total issued share capital of SSI, and China Sonangol held 45% of the total issued share capital of SSI. China Sonangol was a joint venture of New Bright International Development Limited (70% ownership stake) and Sonangol (30% ownership stake). The 50% equity transfer agreement was approved by Angola’s Ministry of Petroleum and Ministry of Finance on February 18, 2005. Then, on February 25, 2005, both parties formally signed the 50% equity transfer agreement (during a visit to Angola by the Vice Premier of China’s State Council). Shortly thereafter, in April 2006, SSI obtained partial equity stakes in additional offshore oil fields known as Blocks 15 (06), 17 (06), and 18 (06). Then, on June 27, 2008, the Grand Cayman Branch of Bank of China Limited (BOC Cayman) and Sinopec Century Bright Capital Investment Limited signed a $1.45 billion syndicated term loan (facility) agreement with Sonangol Sinopec International Limited (SSI) — a special purpose vehicle and joint venture of Sinopec Overseas Oil & Gas Limited (SOOGL) [55% ownership stake] and China Sonangol International Holding Limited (China Sonangol) [45% ownership stake] — for the purpose of financing their cash calls and other amounts related to the exploration and exploitation of crude oil from three offshore oil fields (Block 15, Block 17, and Block 18) in Angola. BOC Cayman contributed $800 million and Sinopec Century Bright Capital Investment Limited contributed $650 million. The term loan facility was secured by a charge over cash flow and an assignment of contractual rights. The loan’s amount outstanding (including principal and accrued interest) was $787,833,300 as of November 30, 2009. The amount outstanding (including principal and accrued interest) to BOC Cayman was $404,781,600 as of November 30, 2009. The amount outstanding (including principal and accrued interest) to Sinopec Century Bright Capital Investment Limited was $383,051,700 as of November 30, 2009.