China Daily reported that Asia largest refiner Sinopec Corp has formed an alliance with Japanese trading company Marubeni Corp for overseas energy and petrochemical projects in regions like South America and Africa.

Mr Huang Wensheng spokesman of Sinopec said "We do not rule out the possibility to cooperate with Marubeni in overseas projects since the Japanese company has a very diversified business portfolio and is active in many fields, adding that the two companies already have several cooperative projects in China."

Sinopec or China Petroleum & Chemical Corp has not disclosed any further details on the cooperation plan so far.

Mr Lin Boqiang director of the China Center for Energy Economics Research at Xiamen University said "Sinopec is seeking partners who have access to overseas resources and rich experience in international projects which the refiner lacks."

Mr Zhou Xiujie an industry analyst with China Investment Consulting said the company is also looking for partners who are strong in marketing refinery and chemical products.

Mr Lin said South America and Africa are not exactly the top destinations for energy producers. Many Chinese energy companies are also in a weak position to jostle for global resources, as they were slow in entering the race. But Mr Zhou believes South America and Africa have a more stable political environment and are less competitive than the Middle East region from which China currently imports most of its oil.

Mr Zhou said "It's strategically important to diversify resource channels."

According to a recent study from China Oil Gas & Petrochemicals China may add about 30 million tons of oil-refining capacity this year to cope up with the surging demand. That marks a 10% growth from a year earlier.

(Sourced from China Daily)