Thursday, March 26, 2009

China eyes foreign shopping spree

China will encourage its energy companies to make more forays abroad to ensure the country's energy security, an even more important strategy than exploration at home, a senior energy official said today.

"Appropriately obtaining global resources is our inevitable choice and legal right...Winning foreign resources is even more important than stepping up domestic production," Reuters quoted Liu Qi, deputy head of National Energy Administration as telling an industry forum.

He said that his office is helping big Chinese oil companies talk with Papua New Guinea about oil and gas co-operation and has made good progress.

Liu also said China will offer more tax and other policy incentives to oil and gas companies to explore abroad.

He did not elaborate, but state media have said low-interest loans and capital injections could go to oil giants China National Petroleum Corporation (CNPC), Sinopec and China National Offshore Oil Corporation (CNOOC), that aim to expand overseas as the global recession lowers the share prices of possible targets.

Last month, CNPC launched a friendly C$443 million (US$360.6 million) offer for Canada's Verenex Energy, which owns a stake in a promising Libyan oil concession, though the offer was blocked by Libya.

China is working with Burma to build an over 2000 kilometre-long gas and oil pipeline running through Ruili and Kunming in Yunnan province, Guizhou province to Chongqing municipality in southwestern China, Liu said, without providing more details.

The line would help China cut out oil cargoes' long detour through the congested Malacca Strait as well as strengthen China's access to rich energy reserves in Burma itself.

Liu also said that China will not loosen its grip on energy efficiency and environmental protection despite the financial crisis and slowing economy.

S: Upstream Online

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