China Petrochemical Corp, parent of Sinopec Corp <0386.HK>, agreed to buy all of U.S.-based Occidental Petroleum Corp's oil and gas assets in Argentina for $2.45 billion, marking the energy giant's first foray into the upstream market in the Latin America country.

Sinopec's move adds to a growing list of outbound deals in the natural resources sector by state-backed Chinese firms in the past two years as the world's most populous nation scrambles to secure resources for its surging economy.

Sinopec -- the top refiner in Asia and China's largest oil firm by sales -- said in a statement on Friday that the takeover was subject to government approvals.

Occidental's Argentina units hold interest in 23 production and exploration concessions in Santa Cruz, Mendoza and Chubut provinces in Argentina, the statement said.

As of Dec 31, 2009, the concessions held gross proven reserves plus probable reserves of 393 million barrels of oil equivalent. Gross production from 22 producing concessions totaled over 51,000 barrels of oil equivalent per day in 2009, according to the statement.

Overall I do think this is a fair price, Neil Beveridge, analyst at Sanford C. Bernstein in Hong Kong, said of the deal.

On a 2p (proved plus probable) reserves basis we think this is around $6.90 per barrel, which on a (proved) basis is probably slightly higher than the $9.10 that CNOOC paid for their share in the Pan American company. These are very mature onshore oil assets so it is a good fit with Sinopec's core area of expertise.

Occidental noted in its 2009 annual report that its concessions in Argentina expire in 2017, and it was looking to extend the terms of its concessions in Santa Cruz province.

However, in the event Occidental is unsuccessful in obtaining these extensions, Occidental will reevaluate its operations and investments in the country, which may result in decreases in future investment capital allocated to its operations in Argentina and further impairments of its existing investments, the company said in its report.

Sinopec spokesman Huang Wensheng said by phone that he was not in China and did not know whether there were any extension issues.

If there were such issues, they should have been taken care of.

DEALFLOW

Sinopec's Occidental deal follows a recent string of outbound energy M&A from China, where average oil demand rose by almost 13 percent year-on-year in October, Reuters calculations based on official data showed.

The oil giant agreed in October to buy 40 percent of Spanish oil major Repsol's Brazilian arm for $7.1 billion, further strengthening resource-hungry China's presence in Latin America.

It continues along the theme of the globalization of Chinese oil and gas companies and deepens their interest in Latin America, which I think strategically is important for China just given the resources in that region, Beveridge of Sanford Bernstein said.

China has made $13.3 billion worth of oil and gas deals in Latin America so far in 2010, up from zero in 2009, according to Thomson Reuters data. It is the first year since 2005 China has invested in Latin America.

Sinopec Group and offshore specialist CNOOC Ltd <0883.HK>CEO.N> have also been named as eyeing a $7 billion asset sale by Brazilian oil and gas start-up OGX SA .

And in late November, BP said it had agreed to sell its stake in Argentina-based oil and gas group Pan American Energy (PAE) to Bridas Corp, half-owned by CNOOC, for $7 billion, as it raises cash to pay for the Gulf oil spill.

Bridas was owned entirely by the family of Argentine tycoon Carlos Bulgheroni until CNOOC agreed to buy a 50 percent stake for $3.1 billion in March. (Additional reporting by Tom Miles in BEIJING; Writing by Joseph Chaney; Editing by Lincoln Feast)

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