Energy companies focus on overseas investment to promote economic development

Since the beginning of this year, Chinese energy companies have gradually accelerated the deployment of overseas resources, and mergers and acquisitions of energy companies have become more active. For example, Sinopec International Petroleum Exploration and Development Company acquired a 33% asset interest in five shale oil and gas projects in the United States for US$2.2 billion; CNOOC spent US$15.1 billion to launch the acquisition of Canadian energy company Nexen.

As the largest electric power company in China, the national grid frequently uses overseas projects. According to the official website of the State Grid, State Grid International Development Co., Ltd. plans to acquire 100% of the assets of the seven transmission concession companies under Brazil’s ACS company for a total of 1.05 billion reais (about US$530 million), most of which have already been put into operation. The remaining assets are expected to be put into commercial operation one after another before the end of this year.

Prior to this, the State Grid Corporation once purchased a 40% stake in the Philippines Power Grid for US$1.58 billion and became its largest shareholder. "At present, the pre-investment has been recovered and the profit has not been affected by political factors. It is the benchmark of the company's overseas investment projects." A person from the State Grid headquarters stated.

Ren Haoning, a researcher in the energy industry at China Investment Advisors, believes that as China's energy demand continues to rise, the domestic energy industry faces significant pressure. The practice of energy companies to achieve an international development path by participating in overseas projects is worthy of recognition. This will greatly help improve the competitiveness of domestic energy companies, and it will also help Chinese companies to have more say in the international energy market.