aed sinopec joint venture...60pct sinopec, page-77

AED Oil Shares Rise After Sinopec Group Buys 60% Stake in Field

March 10 -- AED Oil Ltd., the Australian oil explorer drilling in the Timor Sea, rose the most in three weeks in Sydney trading after selling 60 percent of its largest field to a unit of China Petrochemical Corp., or Sinopec Group.

AED surged as much 43 percent to A$2.65, the biggest gain since Feb. 15, and was the top-performer in the benchmark S&P/ASX 200 Index. Sinopec International Petroleum Exploration & Production Corp. will pay A$600 million ($559 million) for the stake in the Puffin and Talbot oil ventures, AED said March 7.

Lower-than expected output from Puffin prompted a 76 percent plunge in AED shares over six months before they were halted Feb. 27. The Melbourne-based company in January hired Macquarie Group Ltd. to carry out a review of its business as it seeks more funds to retire debt, repay creditors and develop the nearby Talbot field.

AED spent more than A$160 million on the first phase of Puffin, which started production in October. Sinopec International Exploration will take over as operator of the venture as part of the transaction, which values AED's assets at about A$1 billion.

China, the world's second-biggest energy user, wants its companies to secure supplies abroad to meet demand spurred by an economy that expanded 11.4 percent in 2007, the fastest in 13 years. Sinopec Group, China's second-largest oil producer, pumped about 140,000 barrels a day of crude from overseas fields last year. Puffin has been producing between 6,000 and 10,000 barrels a day, less than expected, AED said Jan. 10.

China Petrochemical is the parent of China Petroleum & Chemical Corp., or Sinopec Corp., Asia's largest oil refiner. Only the U.S. uses more energy than China.