Mainland pipelines lure CNPC to invest
CNPC (Hong Kong) might invest in the development of oil transmission pipelines within mainland cities, according to executive chairman Zhang Ruchun.
After the company's annual general meeting yesterday he said it had completed a study of the potential of the business and was now in discussions with mainland parties about a possible investment.
He declined to reveal the size of the project or whether it would be among the new investments the company hoped to make this year.
Fund-raising plans would be formulated after details of the new projects had been decided, he said.
Mr Zhang said it was difficult to assess the impact on the company if the planned overseas listing of its parent China National Petroleum Corp (CNPC) proceeded.
'We are still studying new projects,' he said.
There have been concerns the red chip's future would be clouded by CNPC's plan to list abroad. Market observers said there was a chance CNPC's listed subsidiaries locally and abroad would be privatised and become part of CNPC's larger listing vehicle.
Mr Zhang said it was not yet known what assets CNPC would put into its future listing vehicle as the listing plan was not finalised.
He said CNPC (Hong Kong) aimed to boost oil production and cut production costs in a bid to bring in bigger profits this year.
The company planned to increase oil production by 6 per cent this year.
The recovery in oil prices would not have much impact on the company because the mainland had already aligned its oil price with the international one, Mr Zhang said.
The need for imports indicated there was still robust demand for crude oil, he added.
The price of crude oil yesterday rose to a 17-month high with Brent crude oil for August delivery surging as much as 32 US cents to $17.20 a barrel on the International Petroleum Exchange in London.
The rise came after a report showed rising United States gasoline demand, bolstering optimism refineries will need to process more oil.