citic look to be wanting to really move forward.This will surely...

citic look to be wanting to really move forward.

This will surely develop into something.

CITIC Resources forms team to hunt for oil and gas assets

Fresh from its failure to acquire Thai Petrochemical Industry, CITIC Resources, a unit of mainland conglomerate CITIC Group, has formed a team to build up a portfolio of oil and gas assets overseas.

Karen Teo

Monday, October 10, 2005

Fresh from its failure to acquire Thai Petrochemical Industry, CITIC Resources, a unit of mainland conglomerate CITIC Group, has formed a team to build up a portfolio of oil and gas assets overseas.
The 10-member team is led by Shou Xuancheng, a 30-year veteran of the oil industry. The former head of PetroChina International joined CITIC Resources as vice chairman last month. He had also worked for PetroChina parent China National Petroleum Corp.

Another senior member of the team is Chen Liang, 36, a CITIC Resources vice president responsible for oil and gas project evaluation and investment. Chen had been a senior geologist at Calgary-based Teknica Petroleum Services since 2002.

Other members include former CNPC engineers Deng Yuanzhong, 39, and Luo Jian, 34.

Deng, with more than 18 years' experience in the business, held senior positions at the CNPC Consulting Center and PetroChina between 1999 and last year. He will be in charge of development and strategic planning.

Luo has also worked for CNPC and has a doctorate in engineering from the CNPC Research Institute of Petroleum Exploration and Development.

He has more than 11 years of experience in oil exploration and development. He will oversee mergers and acquisitions in oil and gas projects, among other areas, at CITIC.

CITIC, whose mainland oil assets consist mainly of interests in the Dagang oil field in the Bohai New Area 50 kilometers southeast of Tianjin, has ambitions to build up an overseas portfolio of oil and gas assets through joint exploration and asset acquisitions.

"The new team will be focusing on oil exploration and production both in the mainland and overseas," says a CITIC investor relations source.

The company, which has HK$1.6 billion in cash, obtained a US$150 million (HK$1.17 billion) syndicated loan from 13 institutions last month. It is evaluating several investment opportunities and may announce a deal by year- end, the source said, adding it may need to raise more funds to complete the deal.

The source said CITIC is also looking for other acquisition targets, for which it may need to tap banks and other sources for funding.

CITIC has not ruled out the possibility of buying other refining assets, after it ended TPI acquisition talks in July, citing the complexity of the deal. It may also acquire other assets from its parent, the source said.

The company's revenue is driven mainly by its Australian assets. Its 78.1 percent-owned unit, CITIC Australia Trading, contributed A$390 million (HK$2.3 billion) to first-half revenue.

CITIC started to make money after it shifted its focus from plywood making to energy and base metals. The company's first-half net profit jumped to HK$93.5 million from HK$3.4 million a year ago as turnover rose to HK$3.1 billion from HK$1.1 billion.