China's giant state-owned oil and gas firm Sinopec is planning to splash big money into a continued expansion abroad to shore up access to energy resources as Beijing touts its main foreign policy initiative. Sinopec expects to boost foreign investment to more than $30 billion, Dai Liqi, director of the firm's foreign cooperation office, told CNBC.
That could mean double the $16 billion the firm spent between 2010 and 2015 in outward investment targeted in 30 countries, where the firm has 50 projects. Dai, however, did not specify the time frame for the increased investment.
The company's push falls under a broader Chinese government initiative, dubbed "One Belt, One Road," a giant plan to strengthen China's investment, influence and trade links to the rest of the world. Sinopec has the money for continued overseas investment — the company's balance sheet remains robust with 135 billion yuan (about $19.56 billion) in cash, wrote Alliance Bernstein's Neil Beveridge in a recent note. Last year, the firm sunk $1 billion to buy Chevron's assets in South Africa. China has been importing energy resources for decades to meet growing demand. As such, the government has long encouraged energy firms to acquire overseas assets.
"We are still quite poor in domestic resources … in Chongqing, we have discovered this new shale gas resource," Dai said, adding that "it's still not enough to meet our needs and we have to furnish resources from abroad."
One of Sinopec's largest foreign investments came in 2013, when it bought one-third of US firm Apache's Egypt business for around $3 billion.