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PetroChina to raise 100b yuan

By Si Tingting and Wan Zhihong (China Daily)
Updated: 2009-05-13 08:03

A PetroChina Co gas station attendant fills up a tank for a customer in Shanghai. [Agencies]

PetroChina Co, the country's largest oil and gas producer, plans to raise as much as 100 billion yuan via debt this year to finance key projects including exploration, refining, oil and gas pipeline networks and overseas operations, company executives said yesterday.

The 100-billion yuan is sufficient to keep the company's projects going this year, said Zhou Jiping, president of PetroChina.

Earlier media reports said that the company would need 150 billion yuan this year.

This year PetroChina plans to boost its oil exploration arm in the Erdos and Tarim basins in northern China and to make strategic adjustments to its refining and chemical projects in the coastal areas, Zhou told reporters on the sidelines of the company's annual shareholders' meeting yesterday.

The company also expects to see sizable and sustained growth in its overseas operations in the next eight to ten years, company Chairman Jiang Jiemin said yesterday.

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PetroChina will boost cooperation with national oil companies in resources-rich countries such as Kazakhstan, Venezuela and Qatar, said Jiang.

PetroChina's parent company China National Petroleum Corp (CNPC) and Venezuela have agreed to build two oil refineries in China, one of which has already kicked off infrastructure construction and is located in the southern Guangdong province, said Jiang.

"If all goes well, China could get 40 million tons of crude oil and heavy oil every year from Venezuela," he said.

PetroChina is also building a pipeline that transports 20 million tons of Kazakhstan oil to China annually. The project will be fully operational by the end of the third quarter.

According to Zhou, overseas mergers and acquisitions will be a key strategic development target for the company, and now is a "good time" to do so since oil prices have fallen 60 percent from last July's record high of $147 a barrel.

"Although we do expect to see difficulties in the deployment, we will actively but cautiously select more overseas strategic projects," said Zhou, adding that the financial crisis has made the company more demanding on the project profitability front.

PetroChina has adjusted its investment plan by lowering the investment volume of ongoing projects by 10 percent while lowering operational cost by 5 percent, Zhou said.

However, he clarified that PetroChina will keep its total investment at the same level as last year's because it expects "long-term energy shortages" in China.

The financial crisis also presented PetroChina a rare strategic opportunity to take advantage of low commodity prices to expand reserves, Zhou said.

PetroChina spokesman Mao Zefeng said last week in Hong Kong that the company would stockpile steel, copper, cement and other raw materials for use in the construction of oil refineries, chemical plants and pipelines.