China National Petroleum Corp (CNPC), parent of Asia's largest oil and gas producer PetroChina, said it secured a $30-billion (U.S.) state loan to fund overseas expansion, as Beijing seeks to secure resources for the world's fastest-growing major economy.
The Chinese government, sitting on more than $2-trillion in foreign exchange reserves, has this year stepped up its backing of state companies scouring the globe for assets and raw material supplies from Australia to Africa and South America to Russia.
CNPC said it entered a 5-year loan deal at a favourable interest rate, with China Development Bank, the policy lender behind most of the $46-billion loan-for-oil pacts this year.
The $30-billion CNPC loan is the latest evidence of the world's number two oil user and top commodity consumer capitalizing on the global downturn.
"Government support has picked up strongly this year, to energy companies and the mining sector. One obvious reason is to diversify the risks of foreign exchange reserves," said a veteran Beijing-based energy analyst, who declined to be named due to company policy.
"The strategic alliance ... carries significant implications in expediting the execution of CNPC's going-global strategy, and in boosting the country's energy security," Jiang Jiemin, general manager of CNPC and chairman of PetroChina, was quoted as saying on the CNPC website
CDB was also behind state aluminum producer Chinalco's ultimately unsuccessful $19.5-billion investment in Anglo-Australian minter Rio Tinto.
CNPC did not elaborate on the interest rate for the loan, nor did it specify any project that might be financed with the loans.
China's state oil majors - including CNPC, Sinopec and CNOOC Ltd - have been actively looking for overseas assets for months.
CNPC, already operating the largest overseas oil and gas assets versus its domestic peers, is in talks to buy 75 per cent of Spanish oil major Repsol's Argentine unit YPF, which could cost $14.5-billion in what would be China's largest ever oil acquisition.
Its listed vehicle, PetroChina , has recently also ventured into oil refining outside China, with a $1-billion deal to buy nearly half of Singapore Petroleum Corp. It is also looking at refineries in Europe and the United States.
Sinopec Group said in June it was buying Swiss oil firm Addax Petroleum Corp. for $7.24-billion. Addax owns oil assets in West Africa and Iraq.
CNOOC's parent confirmed last month it was bidding for Kosmos Energy's stakes in the Jubilee oilfield offshore Ghana.
The $30-billion loan will provide CNPC with fresh ammunition for future expansion after it scored most of the $46-billion loan-for-oil deals this year with oil exporters including Russia, Venezuela, Brazil, Kazakhstan and Angola.