North African crisis disrupts CNPC projects

Updated: 2011-03-22 11:09

By Zhou Yan (China Daily)

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BEIJING - China National Petroleum Corp (CNPC), the country's biggest oil and gas producer by volume, said it is evaluating losses made in Libya recently and its operations in the North African country had been halted after all of its more than 100 employees were evacuated from the country.

CNPC is very closely watching how the situation in the country progresses, said Li Runsheng, the company's spokesman.

CNPC is the only State-owned oil company that has investments in Libya, mainly focused on pipeline construction projects.

"Our 109 employees in the country were evacuated within a week after the Libya crisis broke out," said an official from the International Division of China Petroleum Pipeline Bureau, the operator of CNPC's pipeline projects in Libya, without disclosing the amount of the losses in the country.

"The major task now is to take care of our equipment and other goods in the country, by hiring international employees, and to check contracts," the official said.

The bureau started its investment in Libya in 2001.

The oil supply from Libya, the third-biggest oil producer in Africa, is estimated to have dropped by 195,000 barrels daily in February, according to the International Energy Agency (IEA), which also estimated that Libya's crude oil exports will be out of the market for several months.

But most of the crude oil from the North African country is exported to Europe. So the Libyan crisis has little effect on the operations of Chinese oil firms.

Zhou Chunming, chief financial officer of PetroChina, the listed arm of CNPC, said on Monday that the listed unit has no business in Libya.

Related readings:
North African crisis disrupts CNPC projects China halts Libya investment
North African crisis disrupts CNPC projects Japan quake prompts PetroChina M&A

"Because of the Libyan crisis, political stability will become one of the major factors for us to consider before we invest," said Zhang Weizhong, director of Development Strategy Research Institute under the CNPC's research arm.

He said the company has no investment plans in Libya so far.

"We will not miss business opportunities in Libya in the future if there are any," he said.

"It's difficult to judge the impact of the Libyan crisis on Chinese oil firms' future investment in the region," said Han Wenke, director of Energy Research Institute of the National Development and Reform Commission, without elaborating.

China's oil supply will not be halted because of Libya's crisis because China has diversified oil resources, he said.


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