CNPC Plans to Invest 400 Billion Yuan in Overseas Production Expansion
Jan 19,2019
[Shihua Cai Xun, May 24] China National Petroleum Corporation (CNPC) plans to invest 60 billion U.S. dollars (approximately 400 billion RMB) to boost its annual overseas oil and gas production to 200 million tons. According to a report by Daily Economic News on May 22, Jiang Jiemin, Chairman of the Board of Directors of China National Petroleum Corporation, revealed on May 20 that the company plans to invest 60 billion U.S. dollars (approximately 400 billion RMB) to increase its annual overseas oil and gas production to 200 million tons. Jiang Jiemin stated that CNPC intends to inject the vast majority of its overseas operations into its listed subsidiary. Currently, the company is acquiring a 50% stake in CNPC Exploration from the parent group.
[Shihua Cai Xun, May 24] CNPC plans to invest 60 billion U.S. dollars (approximately 400 billion RMB) to increase its annual overseas oil and gas production to 200 million tons.
According to a report by Daily Economic News on May 22, Jiang Jiemin, Chairman of China National Petroleum Corporation, revealed on May 20 that the company plans to invest 60 billion U.S. dollars (approximately 400 billion RMB) to increase its annual overseas oil and gas production to 200 million tons. Jiang Jiemin stated that CNPC intends to inject the vast majority of its overseas operations into listed companies. Currently, the deal through which the company is acquiring a 50% stake in CNPC Exploration from the parent group remains pending approval from the state before it can be resumed.
Although international oil prices have recently plummeted, Jiang Jiemin expects this will not significantly affect the company's first-half performance.
Overseas operations will be injected into the listed company.
Jiang Jiemin stated that CNPC will acquire a 50% stake in Zhongyou Exploration, a subsidiary of the group company, at an appropriate time.
Currently, CNPC Exploration is jointly owned by CNPC Group and PetroChina, each holding a 50% stake, and is specifically responsible for the development of overseas business. This transaction is currently awaiting approval from the state before it can resume. Once the transaction is completed, CNPC Exploration will ultimately be dissolved.
In the future, CNPC hopes to establish the Middle East, Central Asia, Africa, the Asia-Pacific region, and the Americas as its five major overseas cooperation zones, aiming to achieve an annual output of 200 million tons of oil and gas assets overseas—equivalent to roughly 4 million barrels per day—and will invest 60 billion U.S. dollars to this end. Currently, CNPC’s crude oil exploration and production capacity has reached 75 million tons per year.
Jiang Jiemin said the company is currently making preparations, primarily through its joint-stock company, and will select a specific period and window to list all shares of Sinopec Exploration in a publicly traded company.
Jiang Jiemin revealed that an oilfield project operated by CNPC in Iran is scheduled to come on stream later in 2010. The oilfield has an annual production capacity of 1 million tons, equivalent to roughly 20,000 barrels of crude oil per day. In 2010, a refinery with an annual processing capacity of 5 million tons is also planned to be completed in Syria.
I hope gas prices will soon align with market conditions.
Jiang Jiemin said that natural gas has become PetroChina’s core business, and the company aims to have natural gas account for 50% of its oil-and-gas equivalent within the next 10 years. The government’s stance is very clear: it will gradually streamline the natural gas pricing mechanism. “PetroChina enjoys a significant advantage in the natural gas sector—its natural gas pipelines account for 70% to 75% of the country’s total, and its natural gas sales represent 70% to 78% of its overall revenue.”
Jiang Jiemin hopes that natural gas prices can better reflect market demand and align with the market as soon as possible, and that the pricing mechanism can be streamlined. However, since natural gas prices affect millions of households and low-income groups, the government will carefully assess the situation, and the company will carry out price adjustments in accordance with the government’s decisions and arrangements.
Meanwhile, CNPC’s coalbed methane business is also being actively promoted. Jiang Jiemin stated that the company plans to achieve an annual production capacity of 4 billion cubic meters within five years.
In terms of shale gas development, PetroChina is actively conducting resource assessments and building pilot zones. Jiang Jiemin specifically pointed out that Kunlun Energy and Kunlun Gas “are each pursuing their own business operations, and there is no conflict between them.” He explained that Kunlun Gas primarily focuses on city gas and CNG services, and the PetroChina headquarters will handle coordination. “There is potential for future integration, but right now there’s neither a timetable nor a roadmap for it.”
The sharp drop in oil prices has little impact on performance.
Jiang Jiemin stated that four months of the first half of the year have already passed, and the company’s business performance for the first four months has been solid. Moreover, the international oil prices used to calculate the company’s May and June results actually corresponded to the oil prices in April and May—prices that had not yet fallen significantly at the time, so the impact on the company was relatively minor.
Regarding the current fluctuations in international oil prices, he stated that large swings in oil prices are abnormal and expressed his hope that crude oil prices would remain stable at between $70 and $80 per barrel.
Jiang Jiemin also shared his views on the refined oil pricing mechanism. He believes that the current mechanism needs to be “further improved,” and that “the 22-working-day period is overly transparent.”
“Currently, international crude oil prices have fallen below $70 per barrel, and under the current domestic pricing mechanism, the government is facing pressure. This is because the public expects refined oil prices to be adjusted downward in accordance with the established mechanism,” said Jiang Jiemin. “CNPC will follow the government’s mechanism and does not want refined oil prices to fluctuate excessively.”
Jiang Jiemin said the government will take into account the needs of low-income households in urban areas when deciding whether to adjust refined oil prices. He expressed his hope that refined oil prices would accurately reflect the relationship between market supply and demand.
Keywords:
Next page
Next page
Related News
Our company has achieved outstanding results in PetroChina’s annual bidding project.
On April 6, our company achieved outstanding results in the “New Access Project for PetroChina’s 2022 Drilling Tools Internal Blowout Prevention Equipment (Check Valves and Plug Valves)” and the “New Access Project for PetroChina’s 2022 Drilling Tools (Drill String Stabilizers).” Among the dozens of companies that participated in the bidding, our company ranked first in the plug valve project, second in the check valve project, and fourth in the drill string stabilizer project.
Email:
Address:
No. 24, Xingye Road, Yangming District, Mudanjiang City, Heilongjiang Province
