The PetroChina Signed a Major Cooperation Agreement, and Join Hands with ENI into the European Marke

On September 13, ENI oil company's official website revealed that the petrochina and Italian oil giant ENI signed a cooperation agreement in Rome. The agreement will cover both domestic and foreign operations, and the details of the agreement have yet to be revealed.

The general manager of PetroChina Wang Yilin and ENI CEO Claudio Dekazi (Claudio Descalzi) jointly attended the signing ceremony. According to the statement of ENI oil company, this cooperation agreement covers the exploration and production of oil and natural gas, natural gas and liquefied natural gas industrial chain, oil and gas trade and logistics field, oil refining and petrochemical and other oil and gas.

A London based oil analyst said that:" this cooperation agreement allows ENI to develop China's resources while allowing petrochina to use ENI's technology to develop its global presence assets." Oil insiders have expressed their views on this heavyweight agreement. Most of these views tend to be the following two points:  the internationalization of CNPC has made a big step forward and the Petro will focus on the European market.

The internationalization of petrochina has taken another step

On September 13, petrochina and ENI resumed their "second leading edge". The signing of a cooperation agreement has brought the two oil companies together again. Many industry insiders questioned: Europe's top oil giant would lift the oil cup, why choose and Eni cooperation?

The reasons are complex, but there are three. First of all, Italy is an important part of the "The Belt and Road ", is the entrance into Europe of "The Belt and Road". Second, eni has long coveted the Chinese market, but has not had a significant effect. Moreover, eni's life is not so moist, on August 21st Barclays downgraded eni from a stake to a reduction. Besides, petrochina is no stranger to eni. Instead, the two oil companies have long known each other. In 2013, petrochina bought mozambique's huge offshore gas field for $4.2 billion. At that time, the owner of the east African gas field was eni of Italy. The two oil companies have also become more cooperative.

In addition, China petroleum has been honed for years, and now it has formed the five cooperation zones of the americas, the Middle East, central Asia, Africa and the asia-pacific, the four major transnational oil and gas strategic channels of kazakhstan, central Asia, Russia and China, and it has formed the three operating centers of trade, processing and warehousing. At a glance, the European market can be called a blank in the international market for oil. For a long time, petrochina has a dream of being a top international oil company. Since petrochina is the international norm, the European space should be complemented. With this cooperation, petrochina has made eni an introduction to its European market. Once petrochina has successfully entered the European market, petrochina's international route has taken a big step forward.

European markets became the focus

China has a long history of favouring European markets. The data show petrochina made an investment in European markets in 2011. If the investment in 2011 is seen as a temptation to enter the European market, today's cooperation could well be called the start of a big push into European markets. On January 10, 2011, petrochina announced a framework agreement with Britain's ineos, which is involved in the refinery operations in Scotland's grangemouth and in the southern French city of lavalle. Under the agreement, the two sides will set up joint ventures to refine crude oil refining operations and related trade activities of the two refineries. PetroChina said in its announcement in January 10th: "if the transaction can be successfully implemented, it will be of great significance for CNPC to optimize its resources and market allocation worldwide and enter the European high-end market." 

Europe's oil resources, which account for only 0.9% of the world's total oil reserves, Europe is not a global hub for oil and gas production. Why should petrochina bet on Europe? It is simple that Europe is not a hub for oil and gas production, but it is a traditional oil and gas consumption center. The EU accounts for less than 4 per cent of the world's oil and gas reserves but a quarter of the world's consumption. Although some European countries have introduced a timetable for fuel cars, but it will not affect the EU's position as a priority for oil consumption.

In 2011, petrochina planned to build a European oil and gas operation center. In recent years, as oil prices have been depressed, the plan to build Europe's oil and gas operations have slowed. But it is not hard to see that, as petrochina adapts to the new normal of low oil prices, the European oil and gas operations center's plans will return. The European market will then become the focus of petrochina's future.

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