CNPC becomes second largest foreign oil company in Peru

Chinese oil company CNPC has added two more blocks to its oil assets portfolio in the South American country of Peru through purchase from the country's largest foreign oil company PlusPetrol of Argentina. The acquisition deal covers Block 8 and Block 1AB in the tropical rain forest area along the Amazon River.
CNPC has previously owned oilfield in northern Peru's Tarara area, producing 4,100 bpd. The latest purchase has enabled the Chinese company to become the second largest foreign oil producer in the country, claimed China's Embassy in Peru.

PlusPetrol currently accounts for over 60 % of the total oil output from Peru by maintaining its daily output at 62,000 barrels. The company purchased Block 8 and Block 1AB during Peru's oil privatisation reform in 1996. Faced with diminishing domestic oil resources, CNPC has sought to "go overseas" and seek equity rights in potential oil blocks abroad in recent years.
The company has established market entry points to North Africa, Central Asia,South America and Southeast Asia in Sudan, Kazakhstan, Venezuela and Indonesia respectively, an official based in Beijing told. Overseas production of oil and gas output by the company stood at 25.09 mm tons and 1.92 bn cm respectively in 2003, out of company domestic oil and gas output totals of 97.33 mm tons and 24.28 bn cm.

Overseas equity production of oil and gas in the year amounted to 12.88 mm tons and 1.39 bn cm respectively. To adapt to the overseas competitive market environment, CNPC has reshuffled its service and engineering forces since 1998, when the Chinese oil industry first began market-oriented reforms.
Specialist service providing companies, including CNPC BGP (Bureau of Geophysical Prospecting), Great Wall Drilling and China Petroleum Engineering and Construction (Group) Corporation (CPECC), have also been established to undertake seismic prospecting, well drilling and facility construction contracts, as part of the company's "go overseas" program. An official said that further downsizing and restructuring of the company's overseas engineering service units would be implemented over the next few years.