Sinopec to Focus on Foreign Asset Acquisition through 2010

BEIJING, Jan 2, 2007 (Dow Jones Newswires)

China Petrochemical Corp., or Sinopec Group, the country's second-largest oil company by assets, will emphasize acquisition of foreign oil and gas assets in the coming years to 2010 to build the company into an international oil major, its general manager Su Shulin said in a posting on its Web site Wednesday.

The posting quoted Su as saying in the company's internal annual meeting that Sinopec should combine its competitive advantages in oil and gas exploration and production, engineering service, refining and trading to obtain more foreign assets.

In December, Sinopec signed a U.S. $2 billion agreement with Iran on developing the Yadavaran oil field, expected to have a potential output of 300,000 barrels of crude oil per day.

Su also said the company should increase domestic exploration to make new discoveries in addition to the Puguang gas field found in 2006 to be one of the country's largest gas fields.

The company has set targets for new discovery of oil reserves and operation revenue growth by 2010, it said, without disclosing the targets.

Sinopec, also the largest oil refiner in Asia, is increasing its interests in investing in foreign upstream resources, even though, in a November report, the International Energy Agency discouraged China from locking up foreign oil and gas resources.

"It is doubtful whether Chinese equity oil investments contribute materially to improving the country's energy security, or even whether they are economically competitive, as no serious economic or strategic assessment has been carried out so far," the IEA said in its World Energy Outlook through 2030.

Su, who became general manager of Sinopec Group in the middle of this year, was a former vice president in charge of oil and gas production in China National Petroleum Corp., the country's largest oil company.

BEIJING, Jan 2, 2007 (Dow Jones Newswires)