Honghua Group unfazed by losses in drilling services
Mainland's leading rig builder sets aggressive targets to turn around sector next year
Honghua Group, the mainland's largest exporter of drilling rigs, expects to be able to turn around its loss-making oil and gas drilling services operation next year after a slump in the first half due to order delays amid a corruption probe at PetroChina.
While a new senior management at the nation's largest oil and gas producer might be more cautious when awarding contracts to third-party suppliers on conventional drilling services, the opposite might be true for unconventional gas drilling, said Honghua chairman Zhang Mi.
"As PetroChina is increasingly co-investing with other firms on new shale gas projects, the procurement of drilling services will be more transparent and open, which would give independent players like us more opportunities," Zhang told the South China Morning Post.
At least six senior executives of PetroChina and its parent firm China National Petroleum Corp have been detained to assist corruption probes and removed from their posts, resulting in delays in new projects and capital spending as new managers were installed.
PetroChina teamed up in May with state-owned energy-to-shipping conglomerate State Development and Investment Corp and state-owned oil-to-property conglomerate Sinochem to co-invest in exploring for natural gas trapped in shale rock formations in Chongqing.
It has also joined forces with Sichuan Energy Investment Group, a state-owned asset management arm of the Yibin municipality in Sichuan, and Beijing Guolian Energy Investment Fund for shale gas explorations in Changning, Sichuan province.