State-run CPC Corp, Taiwan (CPC, 台灣中油) is in talks to buy a stake in a Cambodian oil field from China and plans to “aggressively” bid for energy assets with Chinese partners, company president Chu Shao-hua (朱少華) said.
The purchase is being negotiated with China National Offshore Oil Corp (中國海洋石油), China’s third-largest oil producer, from whom CPC bought a 30 percent share in a Kenyan block in December, CPC media liaison officer Jessica Tang (唐苑莉) said.
The company also plans to process more crude for China National Petroleum Corp (中國石油天然氣), Chu, 61, said in an interview on Thursday.
CPC may spend NT$4.6 billion (US$141 million) on exploration and production this year, Chu said. The refiner spent NT$2.6 billion last year. Current production meets 7 percent of its gas requirements and about 2.5 percent of its crude-oil needs, he said.
“Possible stake purchases in existing fields is an approach we’re aggressively pursuing,” Chu said. “Chinese companies are easier to communicate with than foreign ones.”
CPC and China National Offshore started a joint study in 1998 on possible cooperation in searching for oil and gas in a block in the Taiwan Strait. The purchase of the block in Kenya paved the way for joint overseas exploration and the companies renewed a 2002 agreement last year to jointly drill wells in the southern part of the Strait.
China National Offshore “has a very good track record in exploration and production,” said Charles Chen (陳敏智), who helps manage US$3.7 billion at JF Asset Management Co in Taipei. “Its cooperation with CPC may help Taiwan gain oil resources in the future.”
How much CPC could gain from cooperation in the near term is difficult to assess as very little information is available on the likely reserves and because exploration “requires large investment,” Chen said.
“Benefits for CPC may be limited for now, but you got to work together first and see what chances there may be in the future,” he said.
Still, China National Offshore, “is a worthy partner,” he said.
CPC may process as many as 3 million barrels of Sudanese oil for China National Petroleum in exchange for fees and parts of the refined products, Chu said. This would help CPC better utilize its spare capacity as Taiwan’s fuel demand falls amid the recession, he said.
CPC first refined crude for the Chinese company in 2002 and processed another cargo last year, Chu said.
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