PetroChina Sells Assets Under Strict Scrutiny

It was reported on June 28th that PetroChina may sell gas projects in Australia and oil sands in Canada to curb losses and move funds to more lucrative parts of the Middle East, Africa and Central Asia, two insider sources said.

PetroChina’s plan follows a similar strategic maneuver by the smaller state-owned peer China National Offshore Oil Corporation (CNOOC, 0883.HK), which is preparing to withdraw its operations in the UK, Canada and the US amid fears the assets could be subject to Western sanctions.

The sale follows an internal review of PetroChina’s global portfolio that began last year, the sources said, speaking on condition of anonymity because the discussions were not public.

Unlike CNOOC’s asset sale, they said, PetroChina’s divestiture was more about making ends meet than concerns about US sanctions, as it doesn’t own any oil and gas assets in the US, and the recent political climate in Australia and Canada also plays an important role.

The state-owned oil and gas giant wants to sell some of the assets within the next two years, which have suffered billions of dollars in losses and that PetroChina is no longer competitive.

In the early 2010s, the state-owned energy companies of Communist China were among the biggest acquisitions in the industry, including CNOOC’s $15 billion acquisition of Canada’s Nexen in 2013.

But after the government scrutinized their finances, they became even more sluggish, and the Chinese Communist Party (CCP)’s overseas companies were afraid of strict scrutiny, because all the data were fake, and now they can’t continue to deceive, including the CCP’s stocks listed in the United States.