Sinochem intensifies bid to become a global oil company

China’s Sinochem Corp., in its bid to become a global, integrated oil company, said it plans to build three overseas production hubs with the goal of quadrupling its overseas oil and gas output to 300,000 barrels of oil equivalent per day (boepd) by 2020. Sinochem wants to have production units in Colombia, Brazil and the Middle East, with a combined daily output of 100,000 boepd. The state-run company is a property developer and trader of oil and fertilizer and billions of dollars in investments will be required to carry out its plans. Nearly a decade ago, Sinochem launched its upstream business, which currently produces less than 80,000 boepd. The company posted a record-high net profit of 13 billion yuan (US$2.06 billion) in 2011, and last November it laid out plans to raise US$5.5 billion through an initial public offering in Shanghai. In January this year, Sinochem agreed to acquire Total SA’s stakes in various oil pipelines in Colombia, as well as a small oilfield. The company also agreed to buy a 10% stake from Perenco, the London-based, independent Anglo-French oil and gas company. The deal extends Sinochem’s offshore reach in Brazil, following its acquisition in 2010 of some of Statoil’s deep sea assets which amounted to US$3 billion. Sinochem is still waiting for approval from the Chinese government for its plan to build its first wholly-owned oil refinery in Fujian province. The 240,000 barrel per day Quanzhou plant is expected to cost around US$4.6 billion. (February 9, 2012)