China National Petroleum Corporation (“CNPC”), the parent company of China Petroleum and Chemical Corporation (SNPor Sinopec), reported a record production of 1.73 million barrels of oil equivalent per day (MMBoe/d) in its overseas market last year. Foreign market production climbed 13.9% in 2010 from the 2009 level. However, the Chinese state-owned company saw sluggish domestic gas output over the year, with production growth falling below 10% for the first time in eight years.
Last year’s overseas crude oil production hit 75.82 million tons, up 6.19 million tons (or 8.9%) from the year-ago level, and natural gas surged 67% to 13.7 billion cubic meters (Bcm) on an annualized basis.
CNPC, the country’s largest energy producer by volume, operates in 29 foreign countries and in more than 80 oil and gas projects, which include ventures in Iran, oil sand projects in Canada, Junin 4 project in Venezuela, a coalbed methane gas assignment in Australia and an oil and gas co-operation deal in Singapore.
Crude oil production at the company’s Kazakhstan unit retained its 24 million tons level, whereas its South America unit maintained 10 million tons. Production at the 3/7 block in Sudan also reached an all time high last year. CNPC’s Rumaila field in Iraq also exceeded its target.
CNPC had previously announced its intention to increase overseas equity oil output to 5 million tons or 36.65 million barrels by 2012, as part of its effort to transform into a fully integrated energy company.
On a separate note, even CNOOC Ltd. (CEO) and its parent company, China National Offshore Oil Corp. recorded an impressive oil output overseas through a series of investments in Latin America, Africa and other areas.
On a comparative basis, CNPC’s domestic natural gas production nudged up a modest 6.1% from 68.3 Bcm recorded in 2009. In 2010, CNPC added 286,000 barrels a day, equivalent to 14.3 million tons, of domestic crude oil refining capacity. Importantly, the company pointed out that domestic sales of refined oil products topped 100 million tons for the first time ever. PetroChina Co. Ltd. (PTR) operates most of CNPC’s domestic businesses and some of its overseas operations.
We are currently maintaining our long-term Outperform recommendation on CNOOC stock, and reiterating our Neutral rating on Sinopec and PetroChina.
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