Eyes focus on global growth
Source: Bloomberg News |
May 19, 2011, Thursday
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Print Edition
Print Edition
PETROCHINA Co plans to double the value of its global oil and gas trading business in 2015 through a network of new offices in New York, London and Singapore, Chairman Jiang Jiemin said yesterday.
The value of PetroChina's overseas trading business may increase to US$200 billion from about US$100 billion last year and the volumes transacted may double to 400 million tons, Jiang said in Beijing.
PetroChina, the country's biggest energy company, plans to spend at least US$60 billion on overseas assets this decade to diversify from domestic refining that has turned unprofitable because of state price controls and rising crude costs. This year, the company bought its first gas assets in North America with the purchase of a stake in Encana Corp's Cutbank Ridge assets and gained a foothold in Europe in a venture with UK refiner Ineos Group Holding.
"The company is flexing its financial muscles to expand overseas where profit margins are far higher than the domestic business," Gordon Kwan, head of regional energy research at Mirae Asset Securities in Hong Kong, said by e-mail. "This international diversification gamble could lead to positive earnings surprises in the years ahead."
Refining losses reached 6.1 billion yuan (US$940 million) in the first quarter, PetroChina said on April 27. The company's net income hit 37 billion yuan for the period, missing estimates.
PetroChina's losses from processing crude were more than 5 billion yuan in April, the Beijing-based newspaper Economic Observer said on Tuesday, citing an unidentified person familiar with the situation.
PetroChina, the country's largest refiner after China Petroleum and Chemical Corp, is planning overseas refining, trading and stockpiling centers as part of its global expansion, President Zhou Jiping said earlier. The Beijing-based company has oil-processing and storage bases in Japan and Singapore.
PetroChina's operations in Japan, Singapore and Europe will provide a "solid basis" for its trading business, Jiang said, adding that the company will also build more storage and transportation infrastructure in South America and expand cooperation with local companies in the region to support the New York trading office.
The value of PetroChina's overseas trading business may increase to US$200 billion from about US$100 billion last year and the volumes transacted may double to 400 million tons, Jiang said in Beijing.
PetroChina, the country's biggest energy company, plans to spend at least US$60 billion on overseas assets this decade to diversify from domestic refining that has turned unprofitable because of state price controls and rising crude costs. This year, the company bought its first gas assets in North America with the purchase of a stake in Encana Corp's Cutbank Ridge assets and gained a foothold in Europe in a venture with UK refiner Ineos Group Holding.
"The company is flexing its financial muscles to expand overseas where profit margins are far higher than the domestic business," Gordon Kwan, head of regional energy research at Mirae Asset Securities in Hong Kong, said by e-mail. "This international diversification gamble could lead to positive earnings surprises in the years ahead."
Refining losses reached 6.1 billion yuan (US$940 million) in the first quarter, PetroChina said on April 27. The company's net income hit 37 billion yuan for the period, missing estimates.
PetroChina's losses from processing crude were more than 5 billion yuan in April, the Beijing-based newspaper Economic Observer said on Tuesday, citing an unidentified person familiar with the situation.
PetroChina, the country's largest refiner after China Petroleum and Chemical Corp, is planning overseas refining, trading and stockpiling centers as part of its global expansion, President Zhou Jiping said earlier. The Beijing-based company has oil-processing and storage bases in Japan and Singapore.
PetroChina's operations in Japan, Singapore and Europe will provide a "solid basis" for its trading business, Jiang said, adding that the company will also build more storage and transportation infrastructure in South America and expand cooperation with local companies in the region to support the New York trading office.
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