China's overseas output rises 36% due to new assets

Beijing :  China, the world's second-largest energy consumer, increased its overseas oil production by 36 per cent in the first three months, as state-owned companies bought assets and swapped loans for supply.

Overseas output rose to 1.5 million barrels a day from 1.1 million in the year-earlier quarter, the International Energy Agency said today.

Companies including CNOOC spent $29 billion (Dh106.5 billion) in the 16 months leading up to April this year buying oil and gas assets. China National Petroleum and China Petroleum and Chemical known as Sinopec, also gave out $77 billion (Dh282.76 billion) in ‘loan-for-oil' deals in eight countries, the energy security watchdog of the Organisation for Economic Cooperation and Development said in its monthly Oil Market Report.

"Chinese oil companies are now operating in the upstream sector of 31 countries and have equity production in 20," the IEA said.

"Their equity shares are overwhelmingly concentrated in only four: Kazakh-stan, Sudan, Venezuela and Angola."

Most populous

China, the world's most populous nation and the fastest-growing major economy, consumes more oil than any country except the US. Gross domestic product expanded 11.9 per cent in the first quarter, the fastest pace in almost three years.

The country's national oil companies are a "significant force" in mergers and acquisitions after spending $18.2 billion last year, or 13 per cent of the global total, the IEA said.

So far this year, Sinopec has bought a nine per cent stake in Canadian oil sands producer Syncrude Canada, while PetroChina and Royal Dutch Shell acquired Australian coal-bed methane producer Arrow Energy.

Iraq, Iran

The country's national oil companies have further, "entered contracts committing them to invest at least $18 billion in future exploration and development, mostly in Iraq and Iran," the IEA said.

China imported 29 per cent more oil in the first five months on increased demand for motor fuel and electricity, according to preliminary data released today by the General Administration of Customs. Imports rose to 95.7 million metric tonnes, or 4.65 million barrels a day.

Last year, the country imported 47 per cent of its oil from the Middle East with Saudi Arabia, Angola and Iran the largest suppliers, the IEA said.

"That high degree of reliance is unlikely to change, even though China has been diversifying supply sources to Africa, Central Asia, Russia and Latin America," the agency said.

National oil companies, "have sought to expand their upstream activities in those regions."