China National Petroleum Corporation, parent of the world’s biggest company by market value, has received a $30 billion loan to fund overseas expansion.
The five-year loan will be provided at a discounted interest rate by China Development Bank. Full details of the deal were not forthcoming. But it underlines China’s strategy to accelerate acquisitions of energy resources abroad after spending $12 billion this year on oil fields and refining assets in countries including Singapore and Canada.
The world’s third-biggest economy is taking advantage of lower valuations to build oil reserves and ensure future supplies after demand doubled in the last decade.
Gordon Kwan, the head of regional energy research at Mirae Asset Securities Ltd. in Hong Kong, said, “This reflects China’s intensifying desire to beef up long-term national energy security.” China is “exploiting depressed oil prices while diversifying away from holding too much in U.S. dollar bonds.”
China’s quest for resources had been met with opposition overseas in the United States, Australia and other countries.
Bloomberg said China remained unfazed by the failures as the government’s RMB4 trillion economic stimulus package spurreddemand.