Exclusive: In rare Chinese move, Sinopec seeks partner for Canada shale
By Chen Aizhu
BEIJING (Reuters) - Sinopec Group wants to sell half of its two biggest shale gas fields in Canada to spread costs and accelerate their development as the Chinese energy company focuses increasingly on return of investment, an executive said.
The sale of an overseas asset would be a rare move for one of China's state-owned energy companies, which have spent hundreds of billions of dollars investing in hydrocarbon resources from North America to Australia to secure China's energy supply, often to hostile reaction.
Canadian Natural Resources Minister Joe Oliver told Reuters in Ottawa that Sinopec's stance shows "a state-owned enterprise that is acting like a commercial operation": buying, selling or bringing in partners when appropriate.
Sinopec would join a number of other companies seeking partners in the shale regions of Western Canada, in what has become a buyer's market, albeit a popular one because the high-value shale gas is likely to soon find a ready market in Asia.
"We are not only buyers, but also actively seek joint-venture partners to optimize assets," said Feng Zhiqiang, newly appointed chairman of North America operations at Sinopec International Petroleum Exploration and Production Corp, Sinopec Group's main acquisition vehicle.
"There is no such thing that a state-owned company's job is only to obtain resources. Scale is important, profitable scale is more so," Feng told Reuters in an interview.
Sinopec Group, the parent of top Asian refiner Sinopec Corp, is looking for an equal equity partner for Montney and Duvernay, two Western Canadian shale gas plays totaling some 500,000 acres (2,000 sq. km). They are operated by Daylight Energy, which Sinopec acquired in 2011 for more than $2 billion and later expanded.
A sale could be viewed positively in Canada, where a landmark $15.1 billion acquisition of domestic company Nexen by state-owned Chinese oil firm CNOOC Ltd generated intense political debate and a policy backlash that centered in part on whether state-owned firms would follow market signals like normal commercial companies. Continued...