CNPC to Invest 25% More in Exploration in 2007

BEIJING Jan 24, 2007 (Dow Jones Newswires)

China National Petroleum Corp. (CNPC.YY), the country's largest oil company by assets, Wednesday said it planned to raise investment in exploration by 25% in 2007 to sustain its oil and gas reserves.

CNPC's investment in exploration this year is estimated to exceed CNY250 billion ($32.2 billion), compared with CNY200 billion last year, it said in a statement posted on its Web site.

The investment is similar to its annual profit, it said. CNPC recorded a profit of CNY185.6 billion in 2006, according to a report Wednesday by the CNPC-backed China Petroleum Daily.

Jiang Jiemin, the company's general manager, said in the statement that recent big fluctuations in international crude oil prices may hurt the company's profit growth and challenge the stability of its production. This is because domestic prices of oil products may track international crude prices and change the margins of oil production, refining and sales.

Jiang also said the company will emphasize exploration this year in its overseas blocks and eight domestic basins, without specifying the names of the basins and blocks, according to the China Petroleum Daily report.

CNPC's total assets reached CNY1.4 trillion by the end of 2006, according to a report Tuesday by the official Xinhua News Agency.

In 2006, CNPC produced 106.64 million metric tons of crude oil domestically and 54.5 million tons overseas.

Its proven oil reserves increased by 500 million tons last year.

CNPC is the parent company of the New York-listed PetroChina Co.

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