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Home > China Business, China Economy > Crisis with opportunities

Crisis with opportunities

October 23rd, 2008

Some of the overseas companies badly hurt by the financial crisis may be bought by PetroChina, Asia’s biggest oil and gas producer for which to increase its capacity and meet rising domestic demand.

According to Jiang Jiemin, the company’s chairman at a shareholders meeting yesterday, the feasibility of acquiring some overseas resources companies badly influenced by the global crisis is still being discussed.

“Now the low share prices of some global resources companies provide us good opportunities,” said Jiang,” But every step we should go cautiously.” The impact the world financial turmoil bought to PetroChina was limited and under control, he said.

There are no financial problems in the company currently, but they will readjust their investment plan by giving priority to some key projects, he added.

Analysts hold the opinion that the current drop in oil prices and the constant banking crisis offer good opportunities for Chinese energy companies to commence deals they may not have chances to do before.

Han Xiaopig, senior vice-president of Beijing Falcon Pioneer Technology Co Ltd said now this is a good timing as the Western thirst for cash urgently because of the financial crisis.

China’s oil companies have increased their overseas expansion to meet the rising domestic needs. China National Petroleum Corporation, the parent company of PetroChina, said on Monday it had signed an agreement with Uzbekistan’s state oil company to jointly develop an oilfield in the Central Asian country.

China Offshore Oil Services Ltd, the nation’s largest offshore oil services provider, last month successfully expanded its operations in Europe and Asia and gave it access to international management expertise and technology.

As the rising needs of energy in China, the country’s imports of oil increase rapidly. Statistics showed that China’s oil consumption experienced around 6 percent annual growth in recent years.

Although global crisis has bought some good opportunities for China, some analysts said they should be very cautious in making decisions.

“In my opinion, the recent sharp decrease in oil prices is not a real refection of the market,” said Liu Gu, an analyst at Guotai Jun’an Securities in Shenzhen. Some analysts also suggested that Chinese oil and gas firms looking to make overseas acquisitions should set their sights on smaller targets.

 

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