China's biggest oil producer is working with India's state-owned oil firm to try to secure more oil reserves in Syria to meet surging domestic energy demands.
The China National Petroleum Corp (CNPC), the parent company of Hong Kong and New York-listed PetroChina, has confirmed to China Daily that the Beijing-based oil conglomerate is teaming up with India's Oil and Natural Gas Corp (ONGC) to bid for assets worth up to US$1 billion in Syria.
This is the first time the two historical rivals are cooperating in overseas expansion.
"We are still at the very preliminary stages," said a CNPC director yesterday, who wished to remain anonymous.
Sources also said yesterday that CNPC has signed a US$83-million contract with Peru to explore oil and gas fields there. CNPC sources said the company would conduct explorations through Sapet Development Peru Inc, a subsidiary that has been pumping out oil in northern Peru since 1994.
"It is not a huge deal for CNPC; it is a standard business development exercise for us in that particular region," the source said.
Industry analysts said southern Peru and neighboring Bolivia, the second-biggest natural gas reserves in South America after Venezuela, share similar characteristics, which means the new block has much potential.
Sources said that CNPC and ONGC, the two state-owned oil companies from the world's two most populous nations, were working on a joint offer to buy PetroCanada's 38 percent stake in Al Furat Production Company, Syria's largest oil company, which is operated and majority-owned by Royal Dutch Shell.
Al Furat produced an estimated 10.6 million tons of oil last year, compared with CNPC's 141.9 million tons.
Analysts said that due to the political risks associated with a country like Syria, CNPC and ONGC might be working together to share the risk and reduce the cost of acquisition.
A Reuters report on Wednesday said CNPC and ONGC were competing for the US$2-billion privately-owned Kazakh oil producer Nations Energy. The CNPC source yesterday said he was not aware of the possible buyout in Kazakhstan.
Shares of PetroChina fell 0.78 percent to HK$6.35 (81.4 US cents) yesterday on the Hong Kong Stock Exchange.
(China Daily December 9, 2005)
