PETROCHINA Co, Asia's biggest oil producer, may buy energy companies made vulnerable by the global credit crisis to expand output and meet rising fuel demand in China, Chairman Jiang Jiemin said yesterday.
PetroChina is studying the possibility of acquiring financially stressed resources companies, Jiang said after a shareholders meeting in Beijing.
Oil companies in China have resumed their quest for global resources after a two-year hiatus as the worst financial crisis since the Great Depression and falling commodity prices prompt a sell-off in share markets, making companies cheaper to acquire. Highly leveraged companies are also seeking to sell assets to ease their debt-burdens and cut refinancing risks, Bloomberg News said.
"We are studying the operational status of some international resources companies including energy companies in the capital market, and we will not give up any opportunity if any," Jiang said. The MSCI AC Asia Pacific Energy Index has fallen 55 percent this year, compared with a 38 percent decline in the MSCI World Index. Power companies such as NRG Energy Inc, Calpine Corp and Mirant Corp have come under increased pressure to accept buyouts because of the credit squeeze.
Exelon Corp, the biggest United States utility company by market value, offered this week to buy NRG Energy for US$6.2 billion in stock in a bet that its superior creditworthiness will allow for refinancing of NRG's US$8 billion in debt at lower costs. The credit crunch prompted Constellation Energy Group Inc to accept a US$4.7 billion cash offer last month from Warren Buffett's MidAmerican Energy Holdings Co.
The drop in oil prices and the current bank crisis offer good opportunities for PetroChina to consolidate resources, Jiang said. PetroChina has no financing problems, he said.
Its asset-to-liability ratio is below 30 percent while it is 60 percent at its global peers.