May 21, 2013 (Chinavestor) China has gained notoriety for its fast growing economy, exceeding analyst and government forecasts for numerous years. Large scale investing into production and urbanization has increased the standard of living for the 1.34 Billion inhabitants of the ‘Land of The Red Dragon’ or as some people has dubbed, the ‘Land of Big Exports’. Oil and gas is heavily consumed and relied on by China’s population. The country serves as the largest importer of oil and gas and second largest consumer. With low domestic reserves, there is a heavy reliance for foreign oil and gas, with companies having to invest profound amounts in their operating segments to meet domestic needs.
Petrochina (NYSE:PTR) is the largest oil and gas company in Asia and fifth largest in the world. Capital expenditures increased 27.6% for the 24 months ended December 31, 2012. Onshore operations in Bohai Bay and Daquing oil fields and the construction of Zhongwei-Guiyang pipeline remain focal points with PTR’s expenditure into each business segment domestically. With acquisitions and developments in Canada, Iraq and other offshore oil and gas fields, capital expenditure will increase to sustain these exploration projects. Alongside the Depreciation & Amortization of the capital assets required for large scale oil companies, depletion of their current reserves is a cost which will eventually be recognised unless attended to.
