PetroChina was paying about US$3 billion to buy overseas oil and gas fields.
PetroChina was paying about US$3 billion to buy overseas oil and gas fields from its State-owned parent CNPC through a joint venture to boost sagging output, a source close to the deal said.
PetroChina, whose shares are listed in
Hong Kong and New York, will set up a 50/50 venture with China National Petroleum Corp. (CNPC), China’s dominant oil and gas producer with operations in Latin America, Central Asia and Africa.
PetroChina would likely announce the deal as early as Friday, the source, who spoke on condition of anonymity, said Wednesday.
“Their acquisition will be a 50 percent interest in a joint venture of the (two firms’) combined international assets,” the source said.
Under the deal, PetroChina would not have access to CNPC’s assets in Sudan, the source said.
The Sudanese assets accounted for more than half of CNPC overseas portfolio’s 12.88 million tons of output in 2003.
According to a Deutsche Bank research report in March, Sudan accounted for 52 percent of CNPC’s overseas crude reserves of 1.76 billion barrels. Kazakhstan accounted for 30 percent. PetroChina spokesman Mao Zefeng declined to comment.
PetroChina, which is 90 percent owned by CNPC and counts U.S. billionaire Warren Buffett among its investors, has invited analysts to a presentation Friday to discuss “the company’s latest business development.”
PetroChina said in March it might buy multi-billion dollar overseas assets from CNPC, but did not give details.
The joint venture is aimed at boosting the growth profile of PetroChina, which has few overseas assets and whose oil production at home has been stagnating due to aging oil fields.
PetroChina said in March it expected its 2005 crude oil output to grow just 1 percent from 2004’s 778.4 million barrels.
The acquisition could add about 4 percent to PetroChina’s 2005 oil production, estimated by Lehman Brothers at 106 million tons, it said.
The stock had gained more than 10 percent in the past month.
"The deal is quite neutral (for PetroChina). It is not a very significant deal without the Sudan assets," said Gideon Lo, analyst at DBS Vickers.
