State-run CPC Corp, Taiwan (CPC, 台灣中油) plans to more than double oil and gas reserves in five years to shield Taiwan against the rising cost of importing almost all its supplies of crude, the company's chairman said.
Annual exploration spending will more than triple to NT$10 billion (US$300 million) by 2010 from the NT$3 billion budgeted for this year, Pan Wenent (潘文炎) said in an interview.
The portion used for overseas investments will rise to 80 percent, from 50 percent now, he said.
FILE PHOTO: CHU PEI-HSIUNG, TAIPEI TIMES
Crude oil's climb from US$27 a barrel five years ago to more than US$60 has forced CPC's most aggressive push yet for overseas supplies. Taiwan has almost no oil and gas of its own and wells drilled jointly with China in the waters separating the political rivals have so far failed to produce any commercial discoveries.
"Higher oil prices encourage oil exploration," Pan said on Wednesday. "If there's an opportunity, we should go."
The 62-year-old, who holds a doctoral degree in chemical engineering from the University of Wyoming, oversees the company that provides 75 percent of Taiwan's gasoline and diesel needs.
overseas
CPC's fields overseas have proved oil and gas reserves equivalent to 92.8 million barrels of oil. That's dwarfed by CNOOC Ltd, China's largest offshore oil producer, which has reserves 27 times larger at 2.53 billion barrels. More than 80 percent of CNOOC's reserves are offshore of China.
Taiwan's oil-import bill rose to US$23.5 billion last year, from US$6.81 billion in 2001, according to the Ministry of Finance.
CPC's drive for overseas oil fields places it in growing competition with larger global rivals as asset prices rise and some nations tighten control over resources.
The state-run company is looking for investment targets in Africa, Southeast and Central Asia and Latin America, said Pan, who has spent the last 25 years working at CPC and its subsidiaries. Taiwan wants to break a reliance on shipments from the Middle East, source of 80 percent of the million barrels of crude it buys each day.
"We evaluate around 20 possibilities every year," Pan said.
CPC has a contract with Chad's government to explore for oil and gas in three areas and has been in talks with Nigeria for possible investment.
CPC plans to invest US$39 million in a Libyan field over the next three years after winning rights to explore for oil and gas in the north African country, the company said in December. It won the rights to Murzuq 162, a 4,300km2 area with potential reserves of 500 million barrels of oil, giving the refiner its second African asset.
Outside Africa, CPC has bought stakes in eight fields in Ecuador, Venezuela, Australia, Indonesia and the US to ease dependence on supplies from Saudi Arabia, Kuwait and Iran.
Taiwan Strait
In the Taiwan Strait, CPC is currently developing a field that has approximately 6 billion cubic meters of natural gas, the company said in January 2005. Production is slated to start in 2010.
The state-run oil refiner and Beijing-based China National Offshore Oil Corp (中國海洋石油), the parent of CNOOC, are jointly searching for oil and gas in the Tainan Basin off southern China.
The partners are planning to drill their second exploration well, after what they found in the first turned out to be "not big enough for development," Pan said.
CPC is willing to work with China's state companies in the South China Sea, he said.
"We have good contacts with Chinese oil companies," Pan said.
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