BUENOS AIRES, Feb. 23 (UPI) -- The Chinese footprint on the Argentine energy landscape will increase with the acquisition of an Exxon Mobil downstream unit by the company with a significant shareholding by China's third largest state-owned oil company.
Industry analysts said the acquisition was a key part of the Chinese government strategy to consolidate energy security interests in Latin America.
China has spent more than $13 billion in recent months shopping for energy assets that could be crucial as insurance against disruptions in hydrocarbon supplies and in preparation for future economic growth.
The acquisition of Exxon Mobil downstream unit Esso by Pan American Energy now awaits confirmation to be signed in London later this month.
Pan American Energy is a unit of Bridas Corp., which is jointly owned by Argentina's Bulgheroni family through Bridas Energy Holdings and China National Offshore Oil Corp., one of the three major state-owned oil companies of China.
CNOOC and other Chinese companies, including CNPC, parent of PetroChina, and China Petrochemical Corp., parent of Sinopec, as well as several subsidiaries, are all actively engaged in expanding Chinese energy operations worldwide.
The deal, worth about $800 million-$850 million, was delayed because of Chinese new year festivities earlier in February.
Esso is Argentina's third biggest fuels retailer after YPF and a local unit of Royal Dutch Shell. The acquisition signals the start of a strategic plan by CNOOC and Pan American Energy to develop the refiner and retailer into a larger operation across the country.
Esso operates a network of 450 service stations and an 85,000-barrel-a-day oil refinery but it has only about 14 percent of the retail fuel market, compared with YPF's more than 60 percent.
Esso has been operating in Argentina since 1911. Pan American already supplies most of Esso's crude oil.
The deal signals the end of Exxon Mobil's presence in Argentina, the latest Western oil and gas company to leave the country amid controversy over bureaucracy and excessive government meddling.
Meanwhile, Argentina's Grupo Petersen, which has a 15.4 percent stake in YPF, has said it plans to increase that to 25 percent to better compete against a more proactive Esso operation.
Pan American Energy has performed well and boosted oil and gas output to 241,000 barrels a day of oil equivalent from 142,000 barrels a day nine years earlier. It also doubled its share of total domestic oil and gas production to 18 percent and invested $6.7 billion in exploration and production. The company's total oil and gas reserves are said to total around 1.4 billion barrels of oil equivalent.