By Zhou Yan
DUBAI - Sinochem Group's oil and gas output in the Middle East, Latin America and North Africa is set to reach 15 million tons of oil equivalent by the end of 2020, a goal based on its first successful attempt overseas to independently operate an offshore gasfield in the United Arab Emirates.
By the end of 2011, Sinochem, China's fourth biggest oil company, had produced 2.54 billion cubic meters of gas from the Umm Al Quwain (UAQ) gasfield since starting operation in May 2008, said Li Benli, the assistant president of Atlantis UAQ, the Sinochem subsidiary that operates the field.
Oil equivalent represents the amount of energy released by burning 1 metric ton of crude oil.
The gasfield, which is the company's first exploration and development project in the region, has a stable daily output of 1.41 million cubic meters, Li said.
He added that the gas is sold to Ras Al Khaimah Gas and transferred through a long-distance undersea pipeline.
Sinochem, which used to be the major oil trader in China, started tapping into oil and gas exploration and the gas business in 2002 by setting up a subsidiary focusing on the upstream sector. It now operates 25 blocks in 10 countries, mainly in the Middle East and Latin America.
Unlike China's three biggest oil majors (China National Petroleum Corp, China Petrochemical Corp and China National Offshore Oil Corp), Sinochem does not have a license to explore and develop oil and gas blocks domestically.
So, the Beijing-based Sinochem must eye the global market for sustainable growth in the upstream sector, which will become one of its major growth engines on the backdrop of soaring crude oil prices.
Li Pilong, who was appointed general manager of Sinochem's oil exploration and development division in 2010, mapped out an ambitious plan to achieve a total output of 15 million tons of oil equivalent by the end of 2020, in which Latin America will contribute about two-thirds. The rest will come from the Middle East and North Africa.
Sinochem's biggest overseas acquisition came in May 2010 when it purchased a 40-percent stake in Brazil's Peregrino offshore oilfield from Norway-based Statoil for $3.07 billion, marking its first foray into Brazil.
The company's output in 2011 is estimated to have reached about 3.2 million tons, compared with its cumulative oil and gas production of 8.72 million tons from 2002 to 2010.
Based on the UAQ project, Sinochem will actively seek opportunities in oil-rich countries in the Middle East for further growth, Li at Atlantis said, adding that the company is also planning to set up a logistics center in Dubai in tandem with it's expanding business in the Middle East and North Africa.
China Daily 01/17/2012 page3