Sopuruchi Onwuka

China National Petroleum Corporation (CNPC) and its affiliates are working to revive overseas operations with a war chest of about $100 billion open for acquisitions and new operating licenses; but Nigeria is nowhere in the regions the Asian tiger has mapped out to explore.

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CNPC and its affiliates including China National Offshore Oil Corporation (CNOOC) and Sinopec were bullish with acquisition of companies and operating assets in Nigeria between 2000 and 2010, but some of the firms divested their portfolios and left while others scaled down their exposure in the country during the period of oil price downturn between2015 and 2021.

China’s CNOOC, The Oracle Today reports, holds signifcant 45 percent stake in the very prolific OML 130 which hosts producing Akpo, Egina and Porewei fields. The OML 130 is technically operated by NIgerian indigenous South Atlantinc Petroleum owned by Rt Gen Theophilus Danjuma. But the oil block in in fact operated by French multinational, TotalEnergies.

CNOOC also holds additional indirect 20 percent stake in ExxonMobil operated Usan deepwater field.

Other Chinese firms are currently in the country as marginal commercial interests in some non-operated oil blocks, and Nigeria is no longer in the focus of the new cash backed deals that are about to happen.

The Oracle Today gathered from secondary that CNPC is plotting overseas asset acquisitions as part of its larger plan to rebuild its liquids output and midstream gas processing.

The strategy plus into plans for numerous overseas investments that would see Chinese firms buying up stakes in producing assets and also exploring opportunities for operating licenses that entitles them equity production. Both the CNPC and its listed affiliate, PetroChina, are said to be desperate to boost reserves globally through new acquisitions as they face stagnant oil output at home.

Director of CNPC’s Economics and Technology Research Institute (ETRI), Lu Ruquan, is quoted as saying that the company would renew investing in large oil and gas assets as an operator.

Lu emphasized the need for CNPC to deploy huge budget on more global acquisitions. And sister PetroChina alone flaunts significant $37.5 billion in cash equivalents.

In mapping the geopolitical zones in sight, Lu said that CNPC may try to expand on its liquefied natural gas (LNG) investments in Qatar, extending from last year’s farm-in deal for small stake and a multi-year offtake agreement in QatarEnergy’s massive gas liquefaction plants.

CNPC will also scout for opportunities in South American deep sea acreage adjacent to fields in Guyana where CNOOC is part of an Exxon Mobil-led consortium that struck massive new discoveries.

PetroChina produces more than Exxon Mobil but its share of output from global operations shrank to 11% last year, according to company data, from a peak of nearly 14% in 2019.

Lu cautioned that given sanctions constraints in key hydrocarbon-rich targets such as Venezuela, Iran and Russia, more practical options include extending existing contracts such as those in Kazakhstan and Indonesia, which are nearing expiration.

Chinese companies have refrained from new investments in Russia as other global firms exited following Russia’s war with Ukraine, although China is one of Russia’s biggest oil clients and a fast growing buyer of natural gas.

Strained relations with the United States have hindered opportunities there, where $250 billion in deals were made during last year’s industry consolidation. CNPC and PetroChina do not own any U.S. producing assets and PetroChina delisted from the New York Stock Exchange in 2022 because of auditing scrutiny.

Analysts at Wood Mackenzie predict a revival in international acquisitions by national oil companies (NOCs) after last year’s two-decade low as the industry refocuses on oil and gas amid a slowdown in energy transition activity.

“International business development remains a major priority for China’s largest NOCs, but they have adopted a cautious approach to deal-making in recent years,” Woodmac said.