PetroChina plans to acquire assets worth $3.22-billion from CNPC

PetroChina, the largest oil producer in China said yesterday that it plans to acquire some upstream and downstream assets from its parent company, China National Petroleum Corp for $3.22 billion to increase its capacity.

The world's second-most valuable oil and gas company after Exxon Mobil Corp, PetroChina unveiled it asset acquisition plan after its first-half net profit for 2009 fell 7.2 per cent year-on-year, due to low price of crude oil and decreased demand.

In order to boost its natural gas reserves, PetroChina is planning to acquire CNPC's product share on the Bagtyiarlyk area at Amu Darya Right Bank in Turkmenistan for $1.19 billion, since the area has "high level of prospective reserves" of natural gas, the company said in a separate statement yesterday.

In April 2006, CNPC and the Petroleum Ministry of Turkmenistan reached a basic agreement on the cooperative natural gas project. CNPC signed the product share contract on the Bagtyiarlyk area at Amu Darya Right Bank in Turkmenistan and the Sino-Turkmenistan natural gas purchase and sale agreement with Turkmenistan Petroleum Resource Management and Utilization Bureau and Turkmenistan Natural Gas Konzern respectively.

Under the deal, Turkmenistan will export 30 billion cubic meters of natural gas to China annually for 30 years.

PetroChina is planning to aquire10 domestic refineries from CNPC for $1.62 billion and also acquire the entire interest in oil and gas producer, South Oil Exploration & Development Co. from CNPC for $412.4 million.

CNPC, which has an 86.7 per cent stake in PetroChina, has made an $14.5 billion offer to acquire a controlling stake in Repsol YPF SA's Argentine unit last month, where India's ONGC has joined hands with a consortium of Russian companies to make a counter bid.