China National Petroleum Corp (CNPC), Asia’s largest oil producer, is overhauling its global strategy to reignite deal-making and enhance its reserves. The state-owned energy giant is exploring opportunities in gas liquefaction, deepsea drilling, and optimizing production from aging wells.
According to Lu Ruquan, director of CNPC’s Economics and Technology Research Institute (ETRI), the company may revisit its acquisitive approach of the 1990s and 2000s, when it made significant investments in Sudan, Chad, Kazakhstan, and Indonesia. Lu emphasized the need for CNPC to embark on more global acquisitions, stating, “One needs to paddle harder, or else it will retreat backward.”
CNPC is well-positioned to make a significant impact on the oil and gas landscape, with its listed arm PetroChina holding $37.5 billion in cash equivalents in 2023. The company is eyeing expansion opportunities in Qatar’s liquefied natural gas (LNG) sector, following last year’s deal with QatarEnergy. Additionally, CNPC will explore deep sea acreage in South America, particularly in Guyana, where China’s CNOOC Ltd has made significant discoveries.
This strategic shift comes as CNPC faces stagnant oil output at home and limited new projects globally to boost reserves. Slowing economic growth and increasing electric vehicle adoption are also eroding domestic demand, while geopolitical barriers restrict the company’s room to maneuver.
By revamping its global strategy, CNPC aims to ensure its continued dominance in the energy sector and secure its position as a leading player in the global oil and gas market.
