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People's Daily Online>>China Business

Energy investing benefits world

(China Daily)

11:16, April 03, 2012

Adviser says exploration overseas follows regulations

China's exploration for energy and other natural resources overseas is conducted in strict adherence to international trade rules and is good for the world because it contributes to the supply of natural resources, said Zhang Guobao, chairman of the Advisory Board of the National Energy Commission.

The amount of money China invests in foreign energy resources has been increasing in recent years amid the country's economic growth, Zhang said at an energy forum that was taking place as part of the Boao Forum for Asia. Even so, it has done far less in that way than its Western counterparts, which started on similar endeavors more than a century ago, he said.

Zhang, who stepped down as head of the National Energy Administration on January 2011, said Chinese companies are discriminated against when they invest overseas, even though they do business in a transparent way and obtain projects through public bidding.

"It's a matter of bias perception," he said.

Zhang said China, like other countries, follows international commercial rules when it deals with natural resources that have been tapped overseas.

Generally, China takes crude oil that has been collected overseas and sells it in the global market, and then uses money obtained from those sales to buy oil in the international market for domestic use, he said.

China's three biggest oil companies made $20 billion worth of foreign mergers and acquisitions in 2011, the second-highest record set for such transactions, according to a report from the research institution of China National Petroleum Corp, the country's biggest oil producer. Meanwhile, throughout the world in 2011, the value of merger and acquisitions slumped by 30 percent year-on-year, coming in at $150 billion.

Shale gas, oil sands and other unconventional oil and gas assets as well as deepwater projects were involved in about 70 percent of Chinese oil companies' overseas merger-and-acquisition transactions, said Wu Mouyuan, a researcher with the petroleum company's research arm.

In the past five years, Chinese companies made $230 billion in mergers and acquisitions, more than half of which had to do with natural resources, said Liu Erh-fei, managing director for Bank of America Merrill Lynch's China region.

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Leave your comment4 comments

  1. Name

mad baby at 2012-04-04116.203.208.*
and promise will make the world a beggar soon.they kill innocence,truth,faith,integrity,trust.
madbaby at 2012-04-03116.203.196.*
if we see world big metors they are nothing but a bunch of fools paradise.the diamond lives in coal not in shop.
madbaby at 2012-04-03116.203.196.*
talent lives in villages and small semi urbans when will understand they do not live in metros lavish life.time has gone for these things.the talent has been finished in big cities.
mad baby at 2012-04-03116.203.196.*
and indian school of business to great fools schools of business.

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