Chevron Explores Chinese Oil Partnerships

Chevron Corp. is in alliance talks with Chinese petroleum producers one year after beating out China’s CNOOC Ltd. in a battle to acquire Unocal Corp.

The San Ramon, Calif.-based company is in discussions with CNOOC, PetroChina Co. and China Petroleum & Chemical Corp., known as Sinopec, “to explore partnership opportunities, both inside and outside of China,” said Steve Del Regno, managing director of Chevron’s liquefied-natural-gas, or LNG, trading business in Asia. Del Regno made his comments Tuesday at the U.S.-China Oil & Gas Industry Forum in Hangzhou, China.

Chevron, which opened a Beijing office this year, seeks to capitalize on growing petroleum demand in the world’s most populous nation. CNOOC already is a partner in the Chevron-operated gas-export development off the coast of Western Australia.

“Chevron views China as an important market for LNG in the future, and we want to remain engaged with potential customers and trading partners here,” Del Regno said in his remarks.

Chevron Chief Executive David J. O’Reilly has expanded in Asia to tap oil and gas reserves close to booming markets in China and India. Chevron, the second-largest U.S. oil company, bought a $300-million stake in India’s Reliance Petroleum Ltd. in April to help finance a refinery in Gujarat and open the door to exploration deals with Reliance’s parent.

“There’s quite a bit of opportunity in China,” said Evan Smith, who helps manage $1.3 billion, including PetroChina shares, at U.S. Global Investors Inc. in San Antonio.

Shares of Chevron rose $1 to $62.39 on Wednesday.