#Sinopec to Boost #Oil & #Gas Production to Counter #Refining Losses

China Petroleum & Chemical Corp. plans to boost both the oil production in West China and the exploration efforts for unconventional resources so as to counter losses (fourth-quarter profit fell by 23%) from selling diesel and gasoline at state-mandated prices.

Fu Chengyu, who became chairman of Sinopec’s parent in April, led the group to bid for $9.3 billion in overseas oil and gas assets to diversify from unprofitable fuel making.

“Strategically, Fu wanted to get more balance between downstream and upstream parts of the company, resembling much closely that of Exxon Mobil Corp. and Royal Dutch Shell Plc,” said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co. “Shale gas clearly presents a big opportunity. The important thing to remember is shale gas will only pay in the longer term.”

In 2010, parent China Petrochemical paid $7.1 billion for a 40 percent stake in Repsol YPF SA’s Brazilian unit, China’s largest energy acquisition that year. In 2011, Sinopec itself agreed in November to pay $5.2 billion for a stake in a unit of Galp Energia SGPS SA (GALP) to explore for oil off Brazil’s coast.

In 2012, 78.2 billion yuan will be spent on exploration and production, which is about 45 percent of total expenditure, and 36.8 billion yuan will be spent on upgrading refining plants and boost fuel quality.

For an opportunity to discuss investment, partnership, growth and operational strategies for refining projects across the oil, gas and petrochemical sector, join the Asia Refining Congress which will bring together senior executives from NOCs, IOCs, and government officials be held in:

Singapore – September 17, 2012

Bangkok – December 3, 2012

Shanghai – March 4, 2013

For more information on this congress, download the brochure here or e-mail natalie.tarin@terrapinn.com