UPDATE 1-PetroChina views low oil price as overseas opportunity

Tue May 12, 2009 6:15am BST

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BEIJING May 12 (Reuters) - PetroChina (0857.HK) views current low oil prices as a rare opportunity to expand its overseas reach, especially in areas where it already has a foothold, a company executive said on Tuesday.

"Overseas merger and acquisition is a key strategic development target for PetroChina," President Zhou Jiping told reporters on the sidelines of the company's annual general meeting.

"At the time of the financial crisis when oil prices keep falling, there is a rare strategic opportunity for us," he said. "We are actively but cautiously selecting overseas strategic projects."

He said the company's focus is to strengthen cooperation with national oil companies in resource countries such as Kazakhstan, Venezuela and Qatar while joining hands with international oil majors including Exxon Mobil (XOM.N), Shell (RDSa.L), Chevron (CVX.N) and BP (BP.L).

PetroChina plans to expand their presence in the five major regions where it already has business and will emphasise investment returns when making decisions, Zhou said.

He said the 100,000 barrel-per-day China-Kazakhstan crude oil pipeline will be fully operational by the end of third quarter and the China-Central Asia gas pipeline is proceeding smoothly as planned.

PetroChina would bring in some 40 million tonnes of oil resoures from Venezuela when bilateral projects come on line in the future, said Jiang Jiemin, PetroChina's chairman.

The two sides will build a joint refinery in the east part of Guangdong province in which PetroChina would own a 60 percent stake.

DEBT FINANCING

PetroChina will raise up to 100 billion yuan ($14.65 billion) via debt to finance key strategic projects this year, Zhou said.

The top Chinese oil firm has said it needs 150 billion yuan in financing for 2009.

Zhou said the fund would be used to finance upstream projects in the Erdos and Tarim basins, coastal refineries, oil and gas pipeline networks as well as overseas expansions.

PetroChina has completed talks on liquefied natural gas (LNG) supplies from Exxon Mobil's Australia unit and will have no regulatory obstacle, Zhou said.

An industry source said in February that Exxon Mobil has agreed to sell 2 million tonnes of LNG per year for 20-25 years from its Gorgon project in Australia to PetroChina, though the deal still needs government approval.

($1=6.825 Yuan)

(Reporting by Eadie Chen and Tom Miles; Writing by Jim Bai; Editing by Ken Wills)