The Australian listed AED oil company said yesterday that the Australian Foreign Investment Review Board (FIRB) had approved Sinopec's acquisition of a 60% interest in the company's Oilfield assets, according to Singapore's business times, which also boosted AED's share price by more than 11%.

"AED is pleased to announce that Sinopec's application has been approved by the foreign investment review committee," AED said in a statement yesterday. In March, AED announced that Sinopec International Petroleum Exploration and Development Corporation (SIPC), a wholly-owned subsidiary of Sinopec Group, would invest a $600 million to acquire 60% of the assets of AED's oilfields in northwest Australia. The assets involved in the deal include the puffin and Talbot fields, two of which are valued at a $1bn. According to the agreement between AED and Sinopec International, Sinopec International will be responsible for the operation of these assets. According to the relevant laws and regulations of Australia, the acquisition plan of Australian enterprises or land proposed by foreign governments or their enterprises needs to be approved by the Australian Foreign Investment Review Commission. AED oil has previously submitted its application to the Australian Foreign Investment Review Commission.

The acquisition will be the first time that a Chinese oil company has acquired an interest in an Australian oilfield block. In February, Sinopec International purchased an oil field in Yemen for $465 million. Some analysts believe that China has been looking for cooperation opportunities with various overseas oil and gas resources, and this acquisition will undoubtedly provide important resource guarantee for Sinopec, a domestic refining giant and a major oil importer.

AED has been in debt trouble recently. AED's puffin oil field phase I project cost input has exceeded $160 million. Since it was put into operation in October last year, the daily oil production of the field has been hovering between 60-10000 barrels, lower than the original expected output of 30000 barrels per day. AED's share price has also fallen more than 70 per cent in the past six months. However, AED's share price rose 11.4% on the news of Sinopec's stake. The company has said the proceeds from the sale will be used to pay off debts, invest in new joint ventures and develop new investment opportunities. According to the senior management of AED, having a joint venture partner with rich experience and financial resources like Sinopec meets the strategic requirements of AED. AED oil said that its contract with Sinopec to form an international development company will continue its development activities in these fields, and the two sides also intend to look for other cooperation opportunities in the region.

Yesterday, Sinopec also announced its fiscal situation in the first quarter, with its first quarter net profit of 6.701 billion yuan, down 65.78% from last year's 19.582 billion yuan. Industry insiders said Sinopec's losses were expected due to high international crude oil prices and limited domestic refined oil prices. Sinopec said that the company's refining business sector suffered heavy losses, leading to a decline in the company's overall performance.