China's Sinopec said Friday it will pay $3.54 billion for a 30 percent stake in the Brazilian unit of Portuguese oil giant Galp Energia, marking the latest push by Chinese companies into Latin America.
Asia's top refiner said in a statement the transaction was subject to approval from the Chinese government.
Galp Energia SGPS SA, a major oil and gas producer in Portugal, operates four offshore blocks in the Santos Basin off Brazil, state-owned Sinopec said.
"The acquisition has further expanded Sinopec's overseas oil and gas business operations and will make major contributions to the company's oil and gas output growth," Sinopec said in a statement.
The total cash payout will eventually reach about $5.18 billion, including the value of the 30 percent stake and projected future capital expenditure, Sinopec said.
Shanghai-listed shares in Sinopec closed up 1.2 percent to 7.5 yuan on Friday while its Hong Kong shares were up 3.11 percent at HK$8.25.
Galp Energia, which has projects around the world including Brazil, Venezuela, Uruguay, Angola, Mozambique, Swaziland and Gambia, could not be immediately reached for comment.
China's quest for resources is increasingly taking it to South America, as it seeks to shore up access to oil, gas, coal and iron ore needed to fuel the world's second-largest economy and biggest energy consumer.
Last December, Sinopec said it would buy the Argentinean arm of US Occidental Petroleum Corporation for $2.45 billion, marking its first investment in Argentina's upstream oil and gas sector.
Norwegian energy group Statoil also agreed last year to sell 40 percent of the Peregrino oil field off Brazil to China's Sinochem for nearly $3.1 billion.
That followed a move by state-owned China National Petroleum Corp. to pay $900 million for access to oil deposits in Venezuela's eastern Orinoco region.
Chinese trade with resource-rich Latin America has grown about ten-fold over the past decade as Beijing's search for new sources of raw materials has expanded, while South American purchases of Chinese goods have also climbed.
China's trade with the region reached $183.6 billion in 2010, compared with $121.9 billion in 2009, the latest official figures show.
Chinese investment in Latin America reached $10.5 billion in 2010, up from $7.3 billion in 2009.