PetroChina's US unit poised for dream expansion
Updated: 2013-11-23 10:05
By May Zhou in Houston (China Daily)
After moving its headquarters from New Jersey to Houston earlier this year, PetroChina International America Inc is primed to expand its trade in oil products, and more importantly, gain a firmer footing in North America by acquiring its own refining facilities.
Since 2005, Li Shaolin, president of PCIA, had run the US operations from New Jersey, but the advantages of Houston - the "Oil Capital of the World" - were too big a draw to resist.
Li moved the headquarters there in March, taking offices at the prestigious One Briar Lake Plaza in Houston's Westchase District, adjacent to the energy corridor.
Gazing down at the traffic from his 13th-floor office, Li said: "This freeway is symbolic of what we do: move crude oil, refined oil, natural gas and petrochemicals to trade."
Beijing-based PetroChina Co Ltd is one of the world's largest crude oil producers and traders. In the first half of 2013, it achieved crude oil output of 464 million barrels, up 2.6 percent year-on-year and natural gas output of 1.39 trillion cubic feet, up 8 percent.
"The Houston office started in 2008," Li said. "Back then, I sent only one person here, but I asked this lone person to rent an office big enough for 40 people."
Li's vision of growth materialized. By the beginning of this year, the Houston staff had outgrown the original space and Li rented the entire 13th floor, which is large enough to accommodate 120 to 140 employees.
"We signed a 10-year lease," he said. "I am confident we will expand so much that in three years we will need 140 employees to run our American operations."
Since March, Li has increased his Houston staff to more than 50. "And we are still in the process of hiring more people, including traders, market analysts and accountants," Li said.
"Houston's economy is very vibrant and prosperous, and it has been one of the top three cities in job creation in the past three years.
"As the capital of oil, Houston is home to pretty much all the major petroleum companies in the world. Upstream, midstream and downstream operations of the petroleum industry are all in Houston, all and every aspect of the petroleum business is here, and it is truly quite convenient to conduct business with clients and partners," he said.
Li said PCIA is mostly doing business in midstream and downstream sectors involving refining, pipeline and storage tankers in the entire Americas region - from Canada and the northern United States to Latin America.
Its business has achieved average yearly growth of 27 percent.
"We basically buy petroleum products at Point A, move them to Point B and do some processing for added value, and then move them to Point C to sell," Li explained.
"Currently, our daily trade volume of petroleum products (crude oil, refined oil, natural gas and petrochemicals) is about 1.5 million barrels a day.
"For 2013, we will have a total trade volume of 75 to 80 million tons - the equivalent of the total production volume of the Daqing oilfield in one year," Li said.
Li said that PetroChina's trade activity has grown so significantly that a lot of the big oil companies were starting to keep a watchful eye on it. To Li, this is business as usual. "The cake is only so big; if we take a bigger slice, someone else will have to take less," he said.
Li has two major missions: strengthen his trade team and invest in a refinery, either through a merger or acquisition or by participation in a joint venture with a North American company.