2010-07-14 09:59

BEIJING - Asia's largest refiner Sinopec Corp has formed an alliance with Japanese trading company Marubeni Corp for overseas energy and petrochemical projects in regions like South America and Africa.

"We do not rule out the possibility to cooperate with Marubeni in overseas projects since the Japanese company has a very diversified business portfolio and is active in many fields," Huang Wensheng, spokesman of Sinopec told China Daily on Wednesday, adding that the two companies already have several cooperative projects in China."

Sinopec, or China Petroleum & Chemical Corp, has not disclosed any further details on the cooperation plan so far.

"Sinopec is seeking partners who have access to overseas resources and rich experience in international projects which the refiner lacks," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

The company is also looking for partners who are strong in marketing refinery and chemical products, said Zhou Xiujie, an industry analyst with China Investment Consulting.

South America and Africa are not exactly the top destinations for energy producers, said Lin. Many Chinese energy companies are also in a weak position to jostle for global resources, as they were slow in entering the race.

But Zhou believes South America and Africa have a more stable political environment and are less competitive than the Middle East region from which China currently imports most of its oil.

"It's strategically important to diversify resource channels," Zhou said.

China, may add about 30 million tons of oil-refining capacity this year to cope up with the surging demand. That marks a 10 percent growth from a year earlier, according to a recent study from China Oil, Gas & Petrochemicals.

With the world's second-biggest energy consumer almost reaching the cap level of domestic energy output and demand continuing to go up, many of the companies have no choice but to seek more foreign resources.

The nation may rely on oil imports to satisfy 58 percent of its requirements by 2015. China relied on crude imports to satisfy more than half if its crude requirements in 2009.

Sinopec is internationalizing its business and currently has 47 overseas projects for oil and gas exploration and development. Sinopec bought Calgary-based Addax Petroleum Corp for C$8.3 billion last year to boost oil reserves.

The group's Hong Kong-listed unit, China Petroleum & Chemical Corp, said on March 29, it would pay $2.5 billion to buy a stake in an Angolan field from its parent to boost crude-oil output.

Earlier this year, the refiner paid US oil company ConocoPhillips $4.65 billion for a stake in Syncrude Canada Ltd, an oil-sands producer.

Sinopec is also planning to build a storage base for crude and refined oil in Singapore.

"After acquiring resources, Sinopec may also look for refinery opportunities abroad," said Zhou.