China impounds passports of oil managers

Executives of Chinese oil giant PetroChina Ltd. have been told to hand in their passports as an anti-corruption investigation of the industry spreads. Authorities say five current or former executives of state-owned PetroChina and its parent, China National Petroleum Corp. are suspected of "discipline violations," a term usually used to refer to corruption.

PetroChina managers at the level of division chiefs and above were ordered to hand in their passports. Such a move often is intended to prevent potential suspects or witnesses from fleeing while investigators gather information.

Political analysts say the investigation appears to be part of efforts by China's new leadership under President Xi Jinping to tighten control over state-owned energy companies.

PetroChina's former chairman, Jiang Jiemin, has been fired as head of the Cabinet body that oversees China's biggest state-owned companies, the State-owned Assets Supervision and Administration Commission.The commission's Communist Party secretary, Zhang Yi, visited rank-and-file PetroChina employees at two oilfields in China's northeast to affirm the ruling party's faith in their work. 

PetroChina, with some 550,000 employees, is Asia's biggest oil producer by volume and the world's second-most-valuable energy company by market capitalization, behind Exxon Mobil Corp. 

India's Essar Oil to sign $1 billion debt-for-fuel deal with China

India's Essar Oil Ltd will sign a $1 billion loan deal with China backed by supply of refined products to top state oil producer PetroChina.

Essar Oil could sign a preliminary agreement with China Development Bank (CDB) to borrow that amount during Chinese Prime Minister Li Keqiang's visit to Mumbai, his first foreign trip.

The Indian firm, controlled by billionaire brothers Shashi and Ravi Ruia, has been replacing its rupee debt with lower-cost, overseas loans and has so far refinanced $481 million.

The group hopes to refinance another $1.8 billion within the next three to six months.

Details on pricing of the products and how shipments would be credited against the loan still need to be worked out, the sources said.

The deal could also signal a long-term tie-up on crude supplies, with Essar looking to take ultra-heavy Latin American crude from PetroChina.

Crude oil producers in Latin America have been scouting for new buyers in Asia as the U.S. shale oil and gas boom has reduced demand for their heavy and ultra heavy crudes.

China the frontrunner to buy Exxon out of Iraq oil

China National Petroleum Corp (CNPC) has emerged as the frontrunner to take over Iraq's West Qurna-1 oilfield from Exxon Mobil, a move that would diminish Western oil influence in Iraq a decade after the U.S.-led invasion.
U.S. oil major Exxon is giving up its stake in the giant southern oilfield after clashing with the central government in Baghdad over exploration contracts it had signed with the autonomous Kurdistan region in the north.
Iraqi and Chinese sources said CNPC unit Petrochina is negotiating for Exxon's 60 percent in the $50 billion West Qurna-1 project and that there are rival bidders. Royal Dutch Shell is a minority partner.
For energy-hungry China, a major buyer of Iraqi crude, access to reserves is a strategic imperative, and Beijing is prepared to accept tougher terms and lower profits than Western oil majors and even Russian firms such as Lukoil, which have to answer to shareholders.
Iraq has the world's fourth-largest oil reserves and wants to at least double its production in the next few years and ultimately challenge Russia and Saudi Arabia as the world's biggest oil nation.
China's stealthy advance in Iraq, supported by piles of cash, has already given it a formidable position in prized southern oilfields, and through Chinese oil company Sinopec, its reach has extended into the northern Kurdish region.
By taking on West Qurna-1, Chinese companies would come to dominate Iraq's oilfields with roughly 32 percent of the reserves found in service contracts awarded to foreign companies, up from 21 percent now.

PetroChina agrees $2.2bn Canada gas deal

PetroChina has agreed a deal to buy a 49.9% stake in Canadian firm Encana's natural gas project in Alberta.

According to Ecana, the project contains supplies equivalent to nearly nine billion barrels of oil. State-owned PetroChina, the country's biggest oil and gas producer, will pay $2.2bn for the stake. It is the latest investment in an overseas oil and gas resource by a Chinese firm as companies look to meet growing domestic energy demand.
While investments by state-owned firms that do not involve acquisitions are allowed, Canadian authorities said they were reviewing the details of PetroChina's investment "to determine if it is reviewable under the act".

Venezuela seeks to double oil exports to China

Venezuela is looking to double its daily oil exports to China to 1 million barrels in 2015 from the current level of 500,000 barrels, Venezuelan Oil Minister Rafael Ramirez has said. Speaking at a conference in Beijing on bilateral cooperation, Ramirez said his country, which currently has a verified oil reserve of more than 200 billion barrels, is expected to be one of China's major petroleum suppliers.  
According to statistics from the Organization of the Petroleum Exporting Countries, in April 2012, Venezuela was the fourth-largest source of China's oil imports after Saudi Arabia, Angola and Russia. The country exports a daily average of 460,000 barrels of crude oil to China, accounting for 8.3 percent of the nation's total oil imports.
China's oil imports from Venezuela have been growing from 49,000 barrels a day in 2005 to the current level of around half a million, he said.
According to Ramirez, a joint venture set up by PetroChina and PDVSA, Venezuela's national oil company, is currently producing 100,000 barrels of crude oil per day, and he expected the amount to increase to 1.1 million barrels a day, mainly due to the development of Venezuela's Orinoco heavy-oil belt.