Chinese energy giant PetroChina considers selling its Western holdings

PetroChina may withdraw from Australian and Canadian projects, according to reports in Reuters.

PetroChina may sell its stakes in natural gas projects in Australia and oil sands in Canada, Reuters reported on Tuesday, citing its sources. The Chinese company reportedly wants to cut its losses and divert funds to sites in the Middle East, Africa, and central Asia.

This follows a similar strategic shift by another Chinese energy major, China National Offshore Oil Corporation (CNOOC) which was preparing to exit its operations in Britain, Canada, and the US due to concerns that the assets could become subject to Western sanctions.

People familiar with the PetroChjina matter said the company hopes in the next two years to sell some of these assets, which have incurred billions of dollars in losses and are in areas where the company cannot easily compete, according to the report.

“Australian gas assets – both Arrow Energy and Browse – are considered among the top ‘negative assets’ in PetroChina’s global portfolio,” one of the sources said.

Arrow Energy’s gas business has had $500 million writedown on its Australian gas business, with losses reaching $10 billion since 2010. Photo: Arrow Energy

PetroChina purchased Arrow Energy in 2010 for $2.5 billion via a joint-venture with Shell, in its first investment in Australia’s coal seam gas sector. Three years later, the Chinese firm bought BHP’s stake in Browse, Australia’s largest untapped gas resource, for $1.63 billion.

The company is also looking to offload the wholly-owned MacKay River Oilsands and Dover Oilsands projects in Canada because of losses in producing and processing the tar-like fuel into bitumen, the sources said.

Sources:

Shared by China Environment Net.

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