TAIWAN'S CPC EXPANDING ITS WORLD E&P ROLE

Taiwan's state oil company is moving to expand its presence in international exploration and development. Chinese Petroleum Corp. (CPC), Taipei, has signed agreements to conduct exploration in Nigeria and Iran, In addition, CPC is seeking a partner for exploration in the U.S.S.R., specifically Siberia, a company official said. It also wants to purchase crude from the Soviet Union's Sakhalin Island fields and will consider a barter arrangement for such purchases. Meantime, Taiwan has

Sept. 2, 1991

3 min read

Taiwan's state oil company is moving to expand its presence in international exploration and development.

Chinese Petroleum Corp. (CPC), Taipei, has signed agreements to conduct exploration in Nigeria and Iran,

In addition, CPC is seeking a partner for exploration in the U.S.S.R., specifically Siberia, a company official said. It also wants to purchase crude from the Soviet Union's Sakhalin Island fields and will consider a barter arrangement for such purchases. Meantime, Taiwan has ended its long ban on private investment in its refining industry.

In other downstream action, CPC has pulled out of a $1.4 billion refinery project in Malaysia.

EXPLORATION PUSH

CPC said it will be among the first of many foreign oil companies expected to enter Iran after Tehran's decision to allow exploration by foreign companies.

It was scheduled to send at least one exploration team to Iran last month.

CPC also has tentatively agreed with Nigerian National Petroleum Corp. to conduct exploration on Block OPL 208, a 772 sq mile tract in Nigeria's southern delta region. Plans call for an unspecified number of wildcats, with eventual production split with NNPC under terms of a production sharing contract to be signed later this year.

Nigeria is the third African country, following Gabon and Namibia, in which CPC is exploring.

The Iranian venture marks CPC's 15th overseas upstream project. CPC currently is involved in exploration or development projects in 12 countries.

DOWNSTREAM ACTION

Several of Taiwan's bigger petrochemical companies are expected to acquire interests in the country's refineries following the lifting of the ban against private investment in refining.

At least one group has announced such plans, and industry sources say Formosa Plastics group is almost certain to follow suit in order to have more control over feedstock for the naphtha cracker it is scheduled to begin building early next year.

CPC currently operates a 446,500 b/d refinery at Kaohsiung and a 123,500 b/d refinery at Taoyuan.

In a further relaxation of government controls, privately owned refineries will be allowed to import their own crude under a proposal drawn up by the Ministry of Economic Affairs and awaiting approval by the Executive Yuan.

CPC has dropped plans to participate in a Malaysian refinery designed to process 100,000-130,000 b/d of crude.

CPC last November signed a letter of intent to participate in the project. Under original terms, CPC would have invested almost $44.1 million in exchange for a 15% interest in the project. Other partners were to include Malaysia's state owned Petroliam Nasional Bhd., Caltex Petroleum Corp., and South Korea's Samsung group.

A CPC official said the company decided to withdraw from the project after a study by Taiwan's Commission of National Corporations concluded the venture would be highly risky because of inadequate guarantees of a stable supply of crude.