PetroChina's Ineos buy shows trading ambition; eyes Americas

Tue Jan 11, 2011 11:12am GMT
 

By Judy Hua and Chen Aizhu

BEIJING Jan 11 (Reuters) - PetroChina's move to buy into two refineries in France and Scotland belonging to British firm INEOS is a further step for the Chinese oil giant to become an integrated global oil major and trading powerhouse that will rival ExxonMobil and Royal Dutch Shell RDAa.L, analysts said on Tuesday.

PetroChina , the world's second most valuable energy firm and China's second-largest refiner, may be eyeing refineries in the United States next, while domestic rival Sinopec is most likely to follow it in buying refining facilities overseas.

"They want to have an overall strategy to be a global integrated company and buying a refinery allow them to actually integrate their global product trading operations," said Victor Shum, senior partner at Purvin & Gertz.

"Having a refinery allows them access to physical infrastructure and also production barrels. It's just like ExxonMobil, but maybe better," Shum said.

"So far, they have stakes in two refineries each in Asia and Europe, but not in the U.S. yet. So they may be eyeing the U.S. where many refineries are potentially up for sale," he said.

The framework deal between PetroChina and INEOS will allow the formation of refining ventures at the Lavera refinery in France and Grangemouth in Scotland, which have a total refining capacity of 420,000 barrels per day (bpd).

The joint venture will be the third overseas refinery deal for PetroChina after its refinery acquisitions in Singapore and Japan with a combined investment of more than $2 billion. [ID:nTOE70905Q]

  Continued...

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.6481
Euro USD =1.3127
Rand USD =0.0932