Reorganization of CNPC pipeline business,gathering upstream offshore oil and gas exploration and development

On September 11,China National Petroleum Corporation(hereinafter referred to as CNPC)established a wholly-owned subsidiary,PetroChina North Pipeline Co.,Ltd.,on September 7,with a registered capital of 20 billion yuan.Its main business includes submarine pipeline transportation.For a long time in the past,the upstream businesses of CNPC and Sinopec were concentrated on onshore oil and gas exploration,while CNOOC exclusively monopolized domestic offshore oil exploration and development rights.

In April 2004,the State Council decided to break the sea and land boundary of domestic oil and gas exploration and development,and CNOOC could also land for oil and gas exploration and development activities.In October of the same year,in order to accelerate the exploration and development of offshore oil and gas resources,China Petroleum Offshore Engineering Co.,Ltd.was established.Compared with onshore oil exploitation,offshore oil exploitation is an increasingly high-risk,high-tech and high-investment field.

After obtaining the China Coastal Exploration and Production License issued by the former Ministry of Land and Resources in 2004,PetroChina's offshore oil and gas exploration in China is mainly concentrated in the shallow sea areas of Dagang and Liaohe River,and there are also some offshore blocks overseas.

In the evening of July 23,2020,PetroChina announced that it planned to sell its main oil and gas pipelines,some gas storage tanks,LNG terminals,and underlying oil and gas and other related assets(including its corporate equity)to the National Pipe Network Group(Kunlun Energy Pipeline assets are not included in the scope of allocation),acquire 29.9%of the equity of the National Pipe Network Group,and become the largest shareholder of the National Pipe Network.

Sinopec announced on the same day that the company and its subsidiaries planned to transfer the equity,oil and gas pipelines and supporting facilities and other assets held by them to the National Pipe Network Group,taking the additional equity and/or cash paid by the National Pipe Network Group as the transaction consideration.

The delivery date of the assets involved in the above announcement is September 30.This means that after the asset allocation is completed,the National Pipe Network Group will officially put into operation before the winter gas supply peak.

At present,the delivery of assets of the national oil and gas pipeline network has entered the countdown,and nearly 400 billion assets of"two barrels of oil"will be injected into the national pipeline network group established in December 2019.

PetroChina said that after the pipeline business restructuring,the company will focus more on upstream oil and gas exploration and development,and actively promote the development of oil and gas terminal market.The establishment of PetroChina North Pipeline Co.,Ltd.,a wholly-owned subsidiary of PetroChina,is the preparation for the upstream offshore oil and gas exploration and development in advance.