Brightoil continues talks to buy Newfield's China assets

Brightoil Petroleum, which just raised HK$1.3 billion by selling shares to cut debt and fund expansion after spending US$1 billion on American oil firm Anadarko's China offshore oil assets, is continuing talks to buy similar assets from US firm Newfield Exploration.

However, progress had been slow after the sharp plunge in crude oil prices, with Newfield and Brightoil having divergent views on the outlook for prices, Brightoil chief executive Bruce Yung Pak-keung said yesterday.

"We hope to build our oil and gas production assets, so that in two to three years' time, this business's contribution to our total net profit will rise to as much as two-thirds," he said. A comparison with last year was not made available.

He said the strategy would help balance its fuel trading profit, which had been volatile despite the hedging of its exposure with derivative contracts.

Profit before interest, taxes and one-off gains and losses from oil and gas production accounted for 73 per cent of Brightoil's total profit in the second half of last year, up from 13.7 per cent in the second half of 2013.

Brightoil said in November it planned to submit a bid in an auction for Newfield's 12 per cent stake in a producing oil project in northern China's Bohai Bay, and a 49 per cent stake in a project in the northern South China Sea that started production in November.