China Development Bank contributes to overseas investment loan to finance Sinopec's acquisition of Addax Petroleum Corporation

Project narrative

On June 24, 2009, Sinopec International Petroleum Exploration and Production Corporation (SIPC) — a wholly owned subsidiary of China's Sinopec Limited, a subsidiary of Chinese state-owned China Petrochemical Corporation — entered into a definitive acquisition agreement with Addax Petroleum Corporation — a Geneva, Switzerland-headquartered but Canada-incorporated and Toronto Stock Exchange and London Stock Exchange-listed oil and gas company — in which SIPC agreed to offer to acquire all of the issued and outstanding common shares in the capital of Addax Petroleum by way of a take-over bid for $52.80 CAD per common share in cash. The total consideration was about $8.27 billion CAD ($7.24 billion USD). Sinopec had been bidding against Korea National Oil Company for Addax. On July 9, 2009, Mirror Lake's offer for the shares of Addax commenced and was expected to close by the third quarter of 2009. On July 22, 2009, Addax Petroleum announced that it received a letter from the Minister of Natural Resources of the Kurdistan Regional Government in Iraq, fulfilling one of the conditions of the offer. The finalization of the acquisition was announced on August 18, 2009. On October 2, 2009, Mirror Lake Oil and Gas Company Limited — a Canada-incorporated special purpose vehicle and indirect wholly-owned subsidiary of Sinopec International Petroleum Exploration and Production Corporation — acquired all of the common shares of Addax Petroleum Corporation not taken up during the offer via compulsory acquisition, leaving it with 100% of all issued and outstanding common shares of Addax. The acquisition was reportedly the largest foreign acquisition by a Chinese company to date. In 2009, the Export-Import Bank of China and China Development Bank Corporation (CDB) provided an overseas investment loan (Chinese: 境外投资项目案例) to Mirror Lake Oil and Gas Company Limited to support the acquisition of Addax Petroleum. Addax Petroleum Corporation is an international oil and gas exploration and production company, owning assets in West Africa and Kurdistan, Iraq. It has two blocks in Iraq with a total of 138,200 acres of oil resources and assets in Nigeria, Gabon, and Cameroon, and four joint venture projects in Nigeria’s Sao Tome and Principe Cooperation Development Zone. In total, it had 25 exploration and development blocks, including 15 exploration blocks and 10 development blocks; 17 are located offshore and the remaining 8 are offshore. For the second quarter of 2009, it produced an average of 143,000 barrels of crude oil per day.