The company's president pledges to accelerate its global expansion plans
HONG KONG - PetroChina 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," PetroChina 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. PetroChina 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.
"What is happening in Japan means China 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. "China will have to speed up the development of its gas resources at home and look for more resources overseas."
PetroChina'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, PetroChina 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 China'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 China, providing a huge potential for PetroChina."
China 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, PetroChina's parent China National Petroleum Corp said in a report on Jan 20.
PetroChina has spent $9.2 billion on assets since the start of last year. In February 2010, China'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, PetroChina Chairman Jiang Jiemin said in March last year.
Bloomberg News
