* Earmarks 100 bln yuan for overseas investment this year
* Plans to have half of output from abroad in 5-8 years
* Seeking buys in Central Asia, Australia, Canada, East
* April-June net profit 22.8 bln yuan vs pvs 29 bln yuan
* H1 refining and chemicals loss 28.9 bln yuan
By Charlie Zhu
HONG KONG, Aug 23 PetroChina, the
country's dominant oil and gas producer which also owns
refineries, has earmarked close to $16 billion for overseas
investment this year as it aims to have half its production
outside China within 8 years.
The state-controlled oil giant , whose
overseas output accounted for less than a tenth of its total
production in January-June, will spend more than 100 billion
yuan on overseas exploration, acquisitions and joint ventures
with international oil companies this year, Vice Chairman and
President Zhou Jiping told reporters on Thursday.
"Overseas development is a significant strategy for
PetroChina. We will continue to accelerate our overseas
investment," he said.
The amount planned for overseas spending is around the same
as what China's leading offshore oil producer CNOOC Ltd
has agreed to pay for Canadian oil firm Nexen Inc
PetroChina has not made any major overseas acquisitions this
year, but will be able to meet its target of having half its
total output abroad in 5-8 years, Zhou said, adding the company
is "actively" looking for acquisition opportunities in Central
Asia, East Africa, Australia and Canada.
"Under the tough global macroeconomic environment, many
companies are reorganizing their assets, which at the same time
has brought many opportunities," Zhou said, without elaborating.
Some international oil companies such as ConocoPhillips
have been divesting assets in a number of countries
including Canada and Nigeria as part of that global asset
reassessment, drawing interest from Asian buyers.
Chinese oil giants, which also include Sinopec Group, parent
of Asia's largest refiner Sinopec Corp
, have been among the most aggressive buyers as they look
to secure reserves to meet demand from the world's
Q2 PROFIT SLUMP
PetroChina posted a drop of more than a fifth in its
second-quarter earnings, hit by refining and chemicals losses.
Global crude oil prices also fell during the second
It warned that the outlook for global economic recovery
would remain "sluggish and tortuous" for the rest of this year
as the euro zone crisis spreads and growth slows in China and
April-June net profit fell to 22.83 billion yuan ($3.59
billion) from 29 billion yuan a year earlier, based on Reuters'
calculations, and lagged an average forecast of 26.73 billion
yuan by 8 analysts polled by Reuters.
The refining and chemicals division posted a loss of 28.9
billion yuan in the first half - most of that in the refining
business - with the company blaming "prolonged weakness in
demand and the government's macroeconomic regulation and control
over (the) price of domestic refined products."
The refining and chemicals business posted a second-quarter
loss of 18.5 billion yuan, compared with a 10.4 billion yuan
loss in the first quarter and a 60 billion yuan loss for the
whole of last year.
Chinese refiners can't fully pass on higher crude oil costs
to consumers as Beijing controls oil product prices to curb
inflation. China's slowing economic growth has also hurt demand
Operating profit at the upstream - exploration and
production - business fell to 53.4 billion yuan in the second
quarter, squeezed by lower crude prices and flat output.
On Tuesday, CNOOC said its first-half net profit fell by
almost a fifth - twice as much as the market had expected - as
operating costs ballooned and it lost some production to an oil
spill late last year.
Operating profit at PetroChina's natural gas and pipelines
division slumped around 85 percent to 1.64 billion yuan in the
first half, with the company having sold imported gas at a loss
due to government price controls.
The loss over the first half of the year was 19.6 billion
yuan, Zhou said, adding Beijing would consider deepening a
market-oriented reform of China's natural gas pricing policy,
leading to higher domestic gas prices.
Crude oil and natural gas output rose 3.8 percent
year-on-year to 667.9 million barrels of oil equivalent (boe) in
January-June. Refining throughput slipped 0.3 percent year on
year and output of ethylene, the basic building block for
plastics, declined 3.2 percent year on year.
PetroChina shares have fallen 1.7 percent this week,
outperforming CNOOC, which is down about 4 percent and Sinopec
Corp, which is down 2 percent. Hong Kong's benchmark stock index
has edged up almost tenth of a percent so far this week.
Sinopec is due to report interim results on Sunday.