China Petroleum and Chemical Corporation (Sinopec Corp.) will make the search for and the development of resources a priority in 2007, senior Sinopec executives said recently.

 

Chen Tonghai, President and chairman of the Board of Directors of Sinopec Corp., said at a conference held last week that the oil giant will step up efforts in oil and gas exploration and development in 2007.

 

According to pre-audit figures, Sinopec produced over 40 million tons of crude oil and seven billion cubic meters of natural gas in 2006.

 

The company exceeded its 2006 profit targets, said Chen Tonghai.

 

Sinopec saw its proven reserves of crude oil grow by 45 million tons in 2006 and natural gas proven reserves increase by 73.9 billion cubic meters.

 

Li Chunguang, vice president of Sinopec, said at the conference that the company will be more active in bidding for oil or gas exploration ventures and in acquiring high-quality overseas oil assets.

 

More effort will be focused on developing, operating and managing overseas projects in 2007, said Li.

 

Sinopec saw its overseas crude oil output reach 4.5 million tons in 2006, making up 11 percent of the company's total crude oil output and up 20 percent on a year ago.

 

Sinopec acquired Russia's OAO Udmurtneft drilling venture by cooperating with Roseneft, Russia's state-owned oil company in 2006. The year also saw the company purchase interests in three offshore oil fields in Angola.

 

China has opened crude and refined oil wholesale activities to foreign capital in 2007 in line with its commitment to the World Trade Organization.

 

The import quota for non-state trading of crude oil and oil products will be 15 percent higher than last year's quota, said Chen Tonghai. Meanwhile, import tariffs for some petrochemical products will decline as the government seeks to increase the cost of resources by adding in environmental and resource rarity costs.

 

Chen predicted more fierce competition in the refined oil market.

 

The government gave China Petroleum and Chemical Corporation (Sinopec) ,a listed subsidiary of Sinopec Corp., a one-off compensation of five billion yuan (641 million US dollars) in 2006 to compensate for losses caused by the gap between the domestic refined oil price -- kept low by the government -- and its overseas equivalent which was pushed up by the soaring international crude oil price.

 

The compensation will be included in the company's total profits for 2006, Sinopec said in its announcement last week.

 

(Xinhua News Agency January 5, 2007)