UPDATE 1-Sinopec Group seeks more overseas acquisitions -chairman

Fri Oct 14, 2011 2:29am EDT

By Farah Master and Alison Lui

HONG KONG Oct 13 (Reuters) - Sinopec Group, Asia's largest refiner, is on the prowl for more foreign oil and gas acquisitions, chairman Fu Chengyu said on Friday, signalling the importance for China's state-owned oil majors to secure enough resources to satisfy growing demand by the world's largest energy consumer.

Fu, speaking at a conference in Hong Kong, said he could not give a specific timeframe for future acquisitions that would expand Sinopec's global presence but would consider opportunities as they arise.

"When we see a good a opportunity and one that can give us good shareholder value, we can do it. Right now we are looking for opportunities," he told a media conference.

Earlier this week, the energy giant signed a C$2.2 billion ($2.1 billion) deal to buy Canadian oil and gas explorer Daylight Energy Ltd . It also bought an 18 percent stake in Chevron Corp's Indonesian deep-water project for $680 million, an official told Reuters on Tuesday.

Sinopec Group is the parent of Hong Kong-listed and Shanghai-listed China Petroleum & Chemical Corp (Sinopec) . The group does overseas upstream oil and gas investment and operations via its wholly owned unit, Sinopec International Petroleum Exploration and Production Corp (SIPC).

Analysts expect more deals in coming months because of the deep pockets of China's energy giants coupled with shriveling stock prices of foreign oil and gas companies.

Fu said China's implementation of a nationwide resource tax on domestic sales of crude oil and natural gas would not have a huge impact on the firm.

"For Sinopec the effective resources tax rate is around 3.7 percent rate. The overall impact is not big," he said.

The sales of crude oil and natural gas sales nationwide would be subject for a tax of between 5-10 percent, China's State Council, or cabinet, said on Monday.

Moves to increase the threshold for the windfall tax on domestic oil and gas production was on the government's agenda.

"The government has already said it will raise the threshold," Fu said.

A plan to revamp China's current fuel pricing scheme and a new scheme for the country's natural gas pricing have been submitted to the State Council, China's cabinet, for approval, an industry source with knowledge of the situation said on Wednesday.

Fu said the government was looking at further reform of the refined product prices mechanism but could not say whether there will be any changes.

Capped domestic fuel prices have weighed on Sinopec's refining margins in the first half of the year due to high crude prices and the state-owned firm's inability to pass on higher costs to customers.

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