CNPC in venture on China oilfield
CNPC (Hong Kong) has announced connected transactions that will see it participate in production at an oilfield in China, sharing the contract with its parent company.
The oil exploration company's wholly owned subsidiary, Hafnium, entered into an oilfield production sharing contract on July 1 with state-owned China National Petroleum Corp (CNPC), which is also its controlling shareholder.
The contract is for the production of crude oil in the Xinjiang Uygur Autonomous Region in China.
Hafnium also agreed to finance a development programme at an oilfield at Karamay in Xinjiang at an estimated cost of US$66 million, in exchange for a 54 per cent participating interest in the area stated in the contract.
Separately, on July 1, CNPC's wholly owned subsidiary, Sun World, entered into an agreement with the company to subscribe $152.02 million for 1.08 billion new shares of CNPC (Hong Kong) at 14 cents a share.
The new shares represent 28.51 per cent of the enlarged issued share capital.
The company said it was talking to the stock exchange regarding the mainland government consent required for the proposals.
Trading of its shares was suspended at the company's request on July 1.
CNPC (Hong Kong) reported a 44 per cent increase in net losses to $20.78 million in the year to December 31, compared with $14.43 million a year earlier. This was despite a gain of $2.5 million in exceptional items.
Losses per share dipped from 0.53 cent to 0.77 cent and no dividend will be paid for a second year.
The company, formerly Paragon Holdings, was bought by the China State Council-controlled petroleum corporation in 1993 for $144 million.
Investigations into alleged insider trading in Paragon shares before the takeover were concluded recently and a criminal inquiry was recommended.
