In a bid to make strategic move, it has been confirmed that Chinese state-owned oil company Sinopec Group has given green signal to claim 30% stake in Portuguese oil firm Galp Energia. Worth $3.54 billion, the deal is being seen as an attempt by the company to make significant impact in Western-owned energy assets.

The deal is believed to ensure long-term success for the company. Earlier, the company made its business acquisition in Brazil worth $7 billion for 40% stake in Repsol. It’s being believed that there are limited opportunities for Sinopec to grow in domestic segment of upstream oil and gas sector, and that’s what triggers the need to explore the potential of other markets.

It is being expected that this deal would give Sinopec 21,300 barrels of oil equivalent per day (boedp) in 2015 and furthermore, it will push the production to 112,500 boedp in 2024. As per the deal, Sinopec's wholly owned unit, Sinopec International Exploration and Production Corp (SIPC), will get shares as allocated by Galp and assume shareholder loans.

"Taking into consideration this investment and projected future capital expenditure, the total cash payout amounts to approximately $5.18 billion at closing”, said Sinopec, which is expecting the agreement to be approved by the Chinese government.

If reports are to be believed, China's strides in the segment of outbound M&A have totaled $37.6 billion, which is far below the mark it achieved last year. Even Galp, a newcomer to large-scale oil projects, would be able to support its plans in oil fields in the deepwater region known as the subsalt region in Brazil. This deal seems to be win-win for both the companies as it would allow them to explore other segments of the economies.