CITIC Resources 2008 profit down, eyes acquisitions

HONG KONG, April 14 (Reuters) - CITIC Resources Holdings (1205.HK), China's fourth-largest oil producer, said on Tuesday its 2008 net profit fell 28 percent due to tumbling oil prices but it would continue to look for crude oil projects at home and overseas.

The oil and metals unit of CITIC Group also said the energy and commodities sectors were expected to see continued pressure this year due to the global economic downturn.

Shrugging off short-term price volatility, CITIC Resources said it would continue to expand its business by acquisitions with a focus on the oil sector.

"We are looking very hard for new oil projects in China and overseas," Chief Executive Officer Sun Xinguo told reporters in a briefing.

But Sun also said any new investment would depend on cash flow.

CITIC Resources has a 50 percent interest in Karazhanbas oilfield in Kazakhstan, which had a full-year contribution to the company for the first time in 2008.

Sun said Karazhanbas produced 1.8 million tonnes of oil in 2008, or an average of 33,500 barrels per day.

"Our production target is about the same this year or a little bit higher," he added.

The breakeven point of its oil production in Karazhanbas was around $40 per barrel, Sun estimated.

Oil CLc1 slipped under $50 a barrel on Tuesday. It has risen 10 percent this year but is way below its peak of over $147 last July.

CITIC Resources also has interests in Seram Island Non-Bula Block, Indonesia and Yuedong oilfield at the Hainan-Yuedong Block, which is expected to start production in 2010.

The company also plans to raise its stake in Australian miner Macarthur Coal (MCC.AX), in which it owns about 20.4 percent.

Its parent, CITIC Group, has a separate 3 percent stake in Macarthur and under Australian rules, big shareholders could buy 3 percent of the company they own every six months without a requirement to make a full takeover offer.

"We are already the largest shareholder of Macarthur," Sun said, adding future purchases of Macarthur shares would depend on the price.

CITIC Resources posted net profit of HK$204.26 million ($26.35 million) for 2008, down from HK$282.78 million a year earlier, due to a HK$6.42 billion provision for impairment of property, plant and equipment in its oil production business.

However, a HK$4.76 billion tax credit due to a change of Kazakhstan's tax rate in 2008 helped offset part of the impact on the provision.

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It had outstanding borrowings of HK$13.8 billion and its net gearing ratio was 115 percent by the end of 2008, down from 165 percent in 2007 after a rights issue last year. ($1=HK$7.750) (Reporting by Alison Leung; Editing by Nick Macfie)