CNPC Sets Sights Overseas to Meet Demand at Home
OREANDA-NEWS. September 20, 2012. China National Petroleum Corp. (CNPC) is aiming to enlarge its overseas investment portfolio in order to generate half of its revenue from assets abroad by 2015, a CNPC executive told.
CNPC, the parent of listed PetroChina Co. Ltd., expects revenue from foreign sources to account for half of total revenue by 2015 and two-thirds in 2020, said Tang Tingchuan, director of development strategy at CNPC’s Policy Research Office, in an interview in Beijing.
Oil and gas demand in China is outstripping the limits of what domestic resources can pump, prompting the country’s majors like CNPC to look beyond its borders in search of reserves, said Tang.
CNPC derives most of its revenue through PetroChina. Interim results released last month show PetroChina’s revenue from overseas operations reached RMB 332.71 billion (USD 52.48 billion) in the first half of this year, accounting for 31.8 percent of the RMB 1.04 trillion (USD 165.15 billion) generated in total.
PetroChina has earmarked nearly USD 16 billion for overseas investment this year, company president and CNPC General Manager Zhou Jiping told reporters at a results briefing in Hong Kong. The company has not made any significant overseas acquisitions this year.
CNPC is open to favorable investment opportunities in any part of the world, Tang said, citing the company’s entry into Sudan after Western sanctions against Khartoum compelled foreign companies to exit the northeast African country.
CNPC’s investment in foreign shale assets is aimed at acquiring advanced technology and know-how, while other upstream acquisitions are to help meeting growing energy demand back home, according to Tang.
Tang cautioned against over-enthusiasm in the domestic shale gas industry, stating that companies with no oil and gas experience should delay their entry until the sector has had time to mature. Overeager junior explorers that fail to realize commercial volumes of shale gas quickly may exit the industry, which would damage shale gas’s reputation in China, Tang said.
Coalbed methane (CBM) may be more promising for non-oil and gas companies as deposits typically lie at depths of less than a kilometer and are considerably easier to exploit than shale gas, according to Tang.
PetroChina’s shale gas operations, including a tie-up with Royal Dutch Shell plc in the Fushun-Yongchuan Block in the Sichuan Basin, are in the experimental stage and producing only limited quantities, Tang noted. PetroChina has output between six and seven million cubic meters of shale gas in total from three wells in the Sichuan Basin so far.
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