CPC kicks off massive investment projects

Taipei, Dec. 26, 2003 (CENS)--With the expected capital spending amounting to NT$500 billion (US$14.7 billion at US$1:NT$34) in the next decade, the state-run Chinese Petroleum Corp. (CPC) has recently launched some massive investment projects.

To boost its domestic and international competitiveness, CPC has mapped out some massive investment projects, including NT$25 billion (US$735.29 million) natural gas receiving station in Taichung Harbor area, central Taiwan; NT$30 billion (US$882.35 million) expansion project for the ethylene plant in Linyuan of Kaohsiung County, southern Taiwan; NT$90 billion (US$2.64 billion) Kaohsiung plant transformation plan; and the NT$376 billion (US$11.05 billion) project to set up an offshore petrochemical technology industrial park in Yunlin County, central Taiwan.

CPC chairman Kuo Chin-tsai said the above-mentioned massive projects are key to the company's sustainable development. Kuo noted the next two years would be a crux for the prospective development of his company.

Kuo said domestic firms wouldn't survive in the highly competitive era without increasing capital spending. Of the top-100 domestic enterprises listed a decade ago, only a third are still kept on the list because most domestic firms were reluctant to launch heavy capital spending.

CPC will see 2003 the most profitable year since the deregulation on the domestic oil industry some years ago. The company will obtain over NT$10 billion (US$294.11 million) in earnings on sales of NT$450 billion (US$13.23 billion) this year, both hitting record highs in history.

CPC attributed the high-level sales to the continued rise of international oil prices in the wake of the U.S.-led war against Iraq. Nevertheless, local oil prices are still hovering in a low gear because of the liberalization of the domestic oil market. At present, the average oil price in Taiwan is much lower than that in the U.S., Japan, South Korea and Southeast Asian nations.

Kuo estimated his company will see annual sales hit over NT$800 billion (US$23.52 billion) after the above-mentioned four massive investment projects are completed, with annual earnings reaching NT$40 billion (US$1.17 billion).

On another front, CPC recently signed an agreement with Chad to help it exploit oil fields. CPC will acquire a 25% stake in a Chad oil field developed by Canada-based Eacana Co.

CPC estimated the Chad oil field bears two billion barrels of crude oil, equivalent to the amount of domestic demand for a decade.

In addition to the exploitation of oil fields, CPC has also resolved to invest in the up- and down-stream natural gas, fertilizer, power generation, and petrochemical sectors in Chad.