Page 14 - CPC 2018 Annual Report

12 CPC Corporation, Taiwan 2018
SEEKING OPPORTUNITIES FOR COOPERATION OVERSEAS
It is likely that over the next 10 years Taiwan’s existing onshore oil and gas fields will become successively exhausted, and this constitutes a call for action to avoid a crisis. CPC is therefore putting a lot of continuous effort into both domestic and foreign exploration and production as wgoing after suitable merger and acquisition (M&A) opportunities.
In particular, and in compliance with both the government’s New Southbound Policy and the international trend towards clean energy, CPC is engaged in both purchase and M&A opportunities with natural gas fields in ASEAN territory and south Asia. The company’s wider exploration initiative encompasses fields in Southeast Asia, Australia, the Middle East (especially Iran), Central and South America and offshore areas of West Africa. CPC’s interest in non-conventional fields is mainly concentrated on M&A of American shale formations and purchasing newly-developed sites. The core objective inherent in acquiring more oil and gas fields through purchase and M&A is to initially augment and later replace, when they run out, Taiwan’s very limited indigenous hydrocarbon resources.
LOGICAL AGGREGATION OF SELF-OWNED OIL AND GAS ASSETS
CPC’s upstream operations were launched in 1959 and today comprise exploration and production in both onshore and offshore oil and gas fields in Taiwan, the Taiwan Strait and overseas. In the main successful, they have to date yielded oil and gas to the value of over NT$200 billion. Looking to the future, the CPC corporate vision is that of becoming a high asset-value international oil and gas business: it is now consistently engaged in upstream international cooperation and M&A activity centered on exploration and boosting its self-controlled oil and gas reserves. The company will endeavor to acquire fields with good production potential, above all those with low risk, and to sign contract rights in currently-producing locations.
In parallel with this, there are initiatives to both develop diversity in the company’s scope of business and to be a player in the fast- growing green energy industry.
CPC’S EXPLORATION AND PRODUCTION PERFORMANCE OVER THE PAST THREE YEARS
Unit: In Millions of New Taiwan Dollars
Year
2015
2016
2017
Operating revenue 9,947
Operating costs 8,597
Earnings 1,350
Pre-tax profit 1,205
10,350
11,439
(1,089)
(6,749)
1.35%
6,509
6,353
156
(10,362)
0.72%
Operating revenue as a share of company’s total revenue*
1.18%
* Total revenue: NT$844 billion in 2015, NT$764 billion in 2016, NT$897 billion in 2017
1-5 6 7-8
9-10
Fields under development or producing
Fields under exploration
US- (Louisiana/Texas boundary)
1 Big Horn OPIC (11.2%)
2 Danube OPIC (10%)
3 Yellowstone OPIC (10%)
4 NW Bearhead Creek OPIC (10%)
5 East Skinner Lakes OPIC (10%)
Operator:Indigo Minerals
US-Texas
6 Maresh OPIC (30%)
Operator:TTEnergy
US-Texas
7 Lazy M5 OPIC (25%)
8 San Jac OPIC (25%)
Operator:GeoPetra