Economy

Markets

Industries

Insights

Reports

Events

CNPC inks oil deal with Syria

By Wan Zhihong (China Daily)
Updated: 2008-04-08 09:27

China National Petroleum Corporation (CNPC), the country's largest oil and gas producer, has signed an agreement with Syria to build a 5-million-ton-per-year refinery in the Middle Eastern country.

The deal was signed on April 2 alongside a framework agreement to bolster oil cooperation between China and Syria, CNPC said on its website yesterday.

The two agreements will expand oil cooperation between the two countries "from the upstream business - oil exploration - to the downstream sector, oil refining", a CNPC statement said.

The agreements were signed by CNPC representatives and Syrian oil ministry officials. A CNPC spokesman declined to disclose further details.

According to Syria's official SANA news agency, the refinery will be built in the eastern oil hub of Deir Ezzor. The project will be completed in 2011.

Sources close to the project said the Chinese company will assume 85 percent of the costs and Syria 15 percent.

Analysts said the move will further boost CNPC's overseas business. With 69 cooperative projects developed in 26 countries so far, CNPC aims "to maintain a sustainable development of overseas business while maintaining a high speed of growth in domestic oil and gas output", company general manager Jiang Jiemin said earlier.

CNPC is in a stage of continued growth in terms of oil and gas reserves, Jiang said, pledging that the company will maintain this upward trend for five to eight years.

The company's overseas projects have been extended to Africa, Central Asia, the Middle East, America and the Asia-Pacific region.

This year the company's expected operation of four refineries domestically, each with a processing capacity of 10 million tons or more, will greatly boost the company's worth.

The four refineries are located in Dalian, Fushun, Dushanzi and Guangxi. The first three are being expanded and the last is currently being built.

In 2007, the company processed 121.73 million tons of crude oil, up 5.1 percent over a year earlier. In the fourth quarter of last year, the company saw an oil processing increase of 6.9 percent due to shortages in south and east China.