1、China National Petroleum Corporation, the countrys largest oil and gas producer and supplier, is now reporting a 23.9-percent profit drop in its gas business for the 2011 fiscal year.Thats because import prices have outpaced domestic market prices.The company is now looking for buying the overseas a
2、ssets to partly ease the situation.CRIs Ding Lulu takes a look.The CNPCs annual fiscal report says the import price from one of its major gas suppliers, Central Asia, has now hit 2.60 yuan per cubic meter.The company plans to increase imports from that area to 24 billion cubic meters in 2012, 10 bil
3、lion more compared to the same period last year.That increase is in line with an estimate in the latest oil and gas transactions report by Ernst & Young.Andy Brogan is Global Oil and Gas Transaction Advisory Services Leader at the accounting firm.This year weve seen a sort of steady upturn in volume
4、s of transactions starting. But the volume of transactions in Q1 were fairly low, so my best guess would be transaction volumes will be by the end of the year 10 percent more than they were last year.Brogan says this growth will be mainly driven by growth in China and the rest of East Asia as demand
5、 from both Europe and the US remain modest as a result of the weak economy.And as demand from China grows, Brogan says Chinese companies are progressively seeking new energy assets.But there has been a shift in where the Chinese are going to get them.Over the course of the last five years, they have
6、 moved from investing in the former Soviet Union through to investing in Africa and South America to last year where the biggest component in investment was in North American unconventional.Earlier this year, Canadian Prime Minister Stephen Harper explicitly said his country was keen on building up
7、a strategic partnership with China in an effort to diversify its energy markets.Chauon Chok, another analyst with Ernst & Young, is forthcoming why the Chinese see gas assets in North America as a huge opportunity.Gas prices in North America are indeed very cheap. Companies are speculating that pric
8、es will go up in the near future, so they want to get their hands on the assets before it is too late. Also, a lot of North American companies are keen to sell their assets because of liquidity issues.However, Brogan implies there will be risks ahead as the supply and demand of gas is not as balance
9、d as that of oil.Change on the supply side of gas is already on the horizon as the U.S. turns from a net gas importer to a net gas exporter in just three years.And China is not very far behind, as companies like CNPC itself vigorously catch up with the technological developments to develop Chinas own domestic shale gas reserves.For CRI, Im Ding Lulu.
