By WAYNE MA

China Petrochemical Corp. said Friday that it has signed an agreement to buy a 30% stake in the Brazilian unit of Portuguese oil company Galp Energia SA for $3.54 billion.

The transaction, which requires approval from the Chinese government, would allow state-owned Sinopec Group to obtain 21,300 bpd of oil equivalent of equity output in 2015, Sinopec said in a statement.

Under the agreement, subsidiary Sinopec International Exploration & Production Corp. will subscribe new shares to be issued by Galp, it said.

"Taking into consideration this investment and projected future capital expenditure, the total cash payout amounts to approximately $5.18 billion at closing."

Galp's assets in Brazil include four deep-water blocks in the Santos Basin, it said.

"It is expected that Sinopec will obtain 21,300 barrels of oil equivalent a day of equity output in 2015, reaching peak output in 2024 at 112,500 barrels oil equivalent a day," it said.

Dow Jones Newswires