China National Petroleum Corp. (CNPC) is looking to foreign resources to secure its, and China's, energy future.
As China's largest energy company by production, CNPC is forecasting continued focus on Canada and Australia as it expands its overseas oil and gas production.
The Chinese energy giant's foreign sales and profits will hit a record high this year, with overseas oil and gas output expected to reach 100 million tons of equivalent oil, compared to 87 million tons in 2010. Jiang Jiemin, CNPC's General Manager, regards Canadian and Australian assets as “top priorities” due to their abundant natural resources.
Wu Mouyuan, an engineer at CNPC's Overseas Investment Environment Research Department, confirms that “the assets that we highly value are liquefied natural gas resources in Australia, for the shipment convenience, while in Canada, we mainly focus on the unconventional natural gas resources."
PetroChina, the listed arm of CNPC, acquired Australia's coal-bed methane developer Arrow Energy Ltd. last year for $3.4 billion, and had planned to purchase a 50% stake in Canada's oil and gas maker Encana in February. However, the deal collapsed in June. CNPC's rival Sinopec recently purchased Canada's Daylight Energy for $2.2 billion, showing a trend in foreign acquisitions by state-owned companies.
Jiang estimates the national demand for fuel will be 20% higher by the end of this year and will continue to increase for the foreseeable future. China is also in talks with Russia to obtain 68 billion cubic metres of naturally gas annually for the next 30 years, although details have yet to be finalised.
China's three largest oil SOEs, CNPC, Sinopec and CNOOC, have seen profits climb 43% from a year earlier to 852.2 billion yuan ($133bn due to an increase in oil and gas production as well as active exploration of overseas markets.