皇冠体育app

Domestic

Japan quake prompts Petro皇冠体育app M&A

By John Duce, Wang Ying and Paul Gordon (皇冠体育app Daily)
Updated: 2011-03-19 09:23

The company's president pledges to accelerate its global expansion plans

HONG KONG - Petro皇冠体育app Co pledged to accelerate acquisitions of energy assets and develop the country's domestic resources of natural gas as demand for the fuel rises following Japan's nuclear reactor crisis.

"We will accelerate our global expansion," Petro皇冠体育app President Zhou Jiping said at a media briefing in Hong Kong on Thursday, after the company posted a record quarterly profit.

"The nuclear plant closure in Japan will boost its demand for oil and gas. That will have a pretty big effect as Japan is the world's largest importer of liquefied natural gas."

Gas prices rose to a two-year high in Europe after the March 11 earthquake crippled Japan's Fukushima Daiichi plant, triggering the worst nuclear disaster since Chernobyl. Petro皇冠体育app bought a $5.4 billion stake in Encana Corp's Cutbank Ridge shale-gas assets last month and is intensifying exploration to supply the world's fastest-growing major economy.

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"What is happening in Japan means 皇冠体育app will use more fossil fuels in the coming years than originally planned," said Neil Beveridge, an analyst at Sanford C. Bernstein & Co in Hong Kong. "皇冠体育app will have to speed up the development of its gas resources at home and look for more resources overseas."

Petro皇冠体育app's gas output rose 5.2 percent in 2010, more than three times as fast as the 1.7 percent gain in crude production. The company aims to boost gas output by 10.4 percent this year, compared with 3.3 percent for oil, Petro皇冠体育app Vice-President Sun Longde said at the media briefing. Proven gas reserves climbed 3.6 percent last year, while those for crude rose 0.1 percent.

"There will be a continued growth momentum in 皇冠体育app's oil and gas demand even if we don't consider the effect of the Japan earthquake," Zhou said. "There's tremendous demand for natural gas in 皇冠体育app, providing a huge potential for Petro皇冠体育app."

皇冠体育app is seeking to triple the use of cleaner-burning gas to about 10 percent of energy consumption by 2020 and reduce dependence on coal. Gas demand may rise to 230 billion cubic meters (cu m) in 2015 from 130 billion cu m this year, Petro皇冠体育app's parent 皇冠体育app National Petroleum Corp said in a report on Jan 20.

Petro皇冠体育app has spent $9.2 billion on assets since the start of last year. In February 2010, 皇冠体育app's biggest oil and gas producer paid C$1.9 billion ($1.9 billion) for a 60 percent stake in Athabasca Oil Sands Corp's MacKay River and Dover oil-sands projects. That was the Chinese company's largest overseas deal until it was surpassed by the Encana transaction.

"We will step up the exploration and development of natural gas and increase the imports of liquefied natural gas," Zhou said. "We will also tap unconventional sources such as tight gas, shale gas and coal-bed methane."

The company wants to half the amount of oil and gas that comes from overseas by 2020, Petro皇冠体育app Chairman Jiang Jiemin said in March last year.

Bloomberg News