ERHC Energy Inc (ERHE)

[majicathome]

PetroChina, CNOOC to Outpace Intl Rivals On Reserve Increases
AFX News Limited Monday, March 31, 2008


CLSA said that the two Chinese oil producers, PetroChina and CNOOC, are likely to outperform international rivals like ExxonMobil and Shell because of lower discovery costs and "their more aggressive production and reserves growth."

In a note to investors, CLSA said that global oil firms will struggle to maintain their output as more accessible reserves decline and discovery costs rise quickly over the next few years.

However, CLSA said that PetroChina (rated "buy") has kept its finding and development (F&D) costs -- the cost of discovering and developing one barrel of oil into proven reserves -- at a lower level than its international peers.

PetroChina spent 5.9 usd/barrel on F&D, compared to 9.7 for ExxonMobil and 15 for Shell.

While CNOOC's F&D costs are higher than PetroChina's, its reserves are still growing quickly at an average of 5.8 pct per year, CLSA said.

CLSA rates CNOOC "outperform."

By contrast, Sinopec, China's biggest refiner, has failed to boost its crude reserves in any "meaningful" way in the last five years, and its F&D costs stand at 12.5 usd/barrel.

Sinopec, which it rates a "sell," must strengthen its upstream capabilities if it is to remain competitive with domestic and international rivals, CLSA said.

http://www.rigzone.com/news/article.asp?a_id=59124