PetroChina on 'buy' drive

PetroChina Co Ltd, the country's largest oil producer, is actively seeking acquisition opportunities in Central Asia, East Africa, Australia and Canada, the company said on Thursday after posting a 6-percent decline in first-half profit on lower crude prices and further losses in refining and chemicals.

Net income fell to 62.03 billion yuan ($9.76 billion) from 66.01 billion yuan registered a year earlier, PetroChina said in a statement to the Hong Kong Stock Exchange. Total income during the first six months rose 9.9 percent to 1.05 trillion yuan.

A worker monitors a natural gas pipeline at the Sebei gas field in Qaidam Basin, Qinghai province. PetroChina Co Ltd said the company's net profit in the first half of the year was 62 billion yuan ($9.7 billion), a 6 percent drop year-on-year. [Photo/Xinhua]

The energy explorer and oil refiner pumped 452.4 million barrels of crude in the first half, up 1.5 percent on 445.8 million barrels in 2011, while the average selling price increased 6.3 percent to reach $107.98 a barrel over the average of $101.62 last year.

Total output oil and gas output rose 3.8 percent to the equivalent of 667.9 million barrels during the period. Some 62.5 million barrels came from its overseas assets, which rose 0.9 percent to account for 9.4 percent of the company's total output.

The company registered a loss of 28.9 billion yuan from refining and chemicals due to factors such as the slowdown of the Chinese economy and controls on domestic fuel prices, the statement said. The delay in natural gas price reforms has also eroded profits.

"The global economic situation bring more merger and acquisition opportunities abroad, PetroChina will evaluate these opportunities prudently, and we are actively seeking acquisition opportunities in Central Asia, East Africa, Australia and Canada," Vice-Chairman and President of PetroChina Zhou Jiping said on Thursday.

The energy group's capital expenditure is estimated to reach 300 billion yuan this year, among which some 100 billion yuan will be allocated to overseas projects, Zhou said. He added that PetroChina will boost overseas production to account for half of its total oil and gas output in the next five to eight years.

"PetroChina should also bear in mind that overseas acquisitions are not easy given these assets they purchase are considered sensitive, particularly as most of those which they seek are onshore projects, which is even more sensitive than the offshore ones," Kenny Tang, executive director of AMTD Financial Planning Ltd, told China Daily.

Besides regular oil and gas production, PetroChina will maintain its heavy investments on the development in unconventional natural gas business. The company will spend more than 10 billion yuan on the three types of unconventional clean energy, namely tight gas, coal bed methane and shale gas, which are also vast in reserves in China, Zhou said.

The State-owned energy giant will continue to invite private capital to look for investment opportunities jointly in infrastructure facilities such as oil and gas pipeline construction. The company said in May it would introduce private investment in the third West-East gas pipeline construction, which is due for completion within three years.

litao@chinadailyhk.com