BP strengthens ties with CNPC for shale exploration and fuel retailing
British oil giant BP (ticker: BP) announced today that the company signed a number of deals with China National Petroleum Corporation (CNPC) during Chinese President Xi Jinping’s state visit to the U.K. this week. In the company’s press release, BP said the two companies have entered into a framework agreement on strategic cooperation covering potential shale gas exploration and production in the Sichuan Basin and future fuel retailing ventures in China and other international partnerships.
As part of the deal, BP will supply 1 million tons of liquefied natural gas (LNG) per annum over 20 years to Huadian, China’s largest gas-fired power generator. The LNG portion of the deal alone is worth up to $10 billion, according to BP. British Prime Minister David Cameron said more than 12 billion pounds ($18.5 billion) worth of oil and gas deals had been signed with China during Jinping’s visit.
BP has an accumulated investment of current operations around $4.5 billion in China, as of the end of March 2015. BP’s business activities in China include petrochemicals manufacturing and marketing, aviation fuel supply, oil product and lubricant retailing, LNG terminal and pipelines and chemical technology licensing. Building on its business successes in China, BP has also expanded partnership relations with the national energy companies beyond the country’s borders.
“BP has been committed to doing business in China for more than 40 years and we’re pleased to expand a partnership that supports continued growth of the Chinese energy sector,” said Edward Yang, BP China President. “We expect China’s energy production to rise 47% and its consumption to grow 60% by 2035, making it the world’s largest energy importer. Through this agreement and others, BP is committed to being one of China’s preferred energy partners now and in the future.”