ASIA: China claims major oil field find

China's biggest oil firm, PetroChina, says it has made the country's largest crude discovery in a decade.

PetroChina said the find off China's north eastern coast had proven reserves of almost three billion barrels.

Western analysts said that while the field, called Jidong Nanpu, would probably produce less than a quarter of that amount, it was still a major find.

China, the world's second-biggest oil consumer, has been seeing supplies slow at its existing domestic wells.

'Major asset'
Energy consultant Andrew Hayman of IHS said that under Western standards, Jidong Nanpu would probably have nearer to 650 million barrels of commercially recoverable reserves.

"This field obviously will be a major asset to the Chinese economy given its proximity to domestic markets," he said.

"And since it is located in [just] three metres of water the costs of development and exploitation will be relatively cheap."

PetroChina is 90% owned by the state-run China National Petroleum Corporation.

BBC

China oil companies to spin off subsidiaries for IPO

China's three largest oil companies, China National Petroleum Corp. (CNPC), China Petrochemical Corp. (Sinopec) <600028> and China National Offshore Oil Corp., are planning to spin off their construction and engineering units in deals that could raise as much as US$3 billion each.

The construction and engineering subsidiaries design and build terminals, wharves, pipelines, drilling platforms, storage facilities and refineries.

According to the South China Morning Post, sources expect the deals to raise between US$2 billion to US$3 billion, while others see US$1 billion-size transactions.

The first deal could come as early as this year.

Mainland oil firms are among several different industries seeking to list companies developing infrastructure in the mainland. Such companies are growing rapidly as China replaces existing outdated infrastructure and expands existing networks to include more of the nation.

www.chinaknowledge.com

Shares of PetroChina were gassed up Thursday, on news of the biggest oil discovery in China in reportedly as much as half-a-century. Intra-day in Hong Kong it soared 16.4%, before ending the day +14% for its highest close since early January, on nearly 8x average volume. PetroChina's Bohai Bay (NE China) find is believed to have over 1 billion metric tons of oil (or 7.5b barrels).

The director of research for China oil and gas at CLSA in Hong Kong said, "The potential net asset value boost from the Jidong discovery is too big to ignore." He cited SEC reserves classification requirements, which could propel the discovery ahead of rival Cnooc's total reserves.

The Wall Street Journal mentions analysts said Chinese demand for crude imports may ease, and companies are also likely to become less willing to pay high prices for upstream assets available globally. PetroChina's ADRs gained 5.65% to $121.26 on more than four times average volume.

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