Oct. 21 (Bloomberg) -- PetroChina Co., Asia's biggest oil producer, may buy energy companies made vulnerable by the global credit crisis to expand output and meet rising fuel demand in China, Chairman Jiang Jiemin said.

PetroChina is studying the possibility of acquiring financially stressed resources companies, Jiang told reporters after a shareholders meeting in Beijing today.

Oil companies in China have resumed their quest for global resources after a two-year hiatus as the worst financial crisis since the Great Depression and falling commodity prices prompt a sell-off in share markets, making companies cheaper to acquire. Highly leveraged companies are also seeking to sell assets to ease their debt-burdens and cut refinancing risks.

``We are studying the operational status of some international resources companies including energy companies in the capital market, and we will not give up any opportunity if any,'' Jiang said.

The MSCI AC Asia Pacific Energy Index has fallen 55 percent this year, compared with a 38 percent decline in the MSCI World Index. Power companies such as NRG Energy Inc., Calpine Corp. and Mirant Corp. have come under increased pressure to accept buyouts because of the credit squeeze.

Exelon Corp., the biggest U.S. utility company by market value, offered this week to buy NRG Energy for $6.2 billion in stock in a bet that its superior creditworthiness will allow for refinancing of NRG's $8 billion in debt at lower costs. The credit crunch prompted Constellation Energy Group Inc. to accept a $4.7 billion cash offer last month from Warren Buffett's MidAmerican Energy Holdings Co.

Drop in Prices

The drop in oil prices and the current bank crisis offer good opportunities for PetroChina to consolidate resources, Jiang said. PetroChina has no financing problems, he said.

The company's asset-to-liability ratio is less than 30 percent, lower than the 60 percent level at its global peers including BP Plc and Royal Dutch Shell Plc, Jiang said.

``Opportunities for mergers and acquisitions have increased but there are uncertainties as oil prices remain volatile and such discussions typically take a long time,'' Grace Liu, an oil analyst with Guotai Junan Securities Hong Kong Co., said in the southern city of Shenzhen.

Benchmark oil prices in New York have fallen about 50 percent from a record $147.27 a barrel reached on July 11. Oil for November delivery traded at $74.22 a barrel at 3:40 p.m. in Hong Kong.

Refining Profits

PetroChina wants to see oil prices at about $80 a barrel, Jiang said today. The company's refining unit will post a profit in November, he said. China's second-biggest refiner reported a loss of 59 billion yuan ($8.6 billion) between January and June this year, compared with a profit of 3.9 billion yuan a year earlier.

PetroChina will spend a higher proportion of its investment on its ``core business'' next year, Jiang said, without giving details.

More than 70 percent of its annual spending will be injected into the company's main businesses in 2009, compared with the current level of between 60 percent and 65 percent, he said. He didn't say what the main businesses are.

The company started building the world's largest gas pipeline in January at a cost of about 142 billion yuan to transport the fuel from Turkmenistan to the nation's south.

Capital expenditure for 2008 will remain unchanged at 207.9 billion yuan, Jiang said today.

Oil Demand

PetroChina shares gained 0.62 percent to HK$6.45 in Hong Kong trading while its Shanghai stock fell 1.9 percent to 11.9 yuan. The shares have dropped more than 60 percent in the last year. The declines have prompted parent China National Petroleum Corp. to increase its stake in the unit. The parent company will continue to boost its holdings in the listed arm, Jiang said, without giving further details.

The financial crisis and China's slower economic growth have weakened oil demand, Jiang said. Stockpiles of petrochemicals have risen to record high, he said.

Mergers and acquisitions by Chinese state-oil companies have increased in the last month.

China Petrochemical Corp., the nation's second-biggest oil producer, last month offered to pay $1.8 billion for Canada's Tanganyika Oil Co. to gain oil and gas operations in Syria.

In a separate transaction, China Petrochemical and China National Offshore Oil Corp., the country's third-largest oil company, agreed to pay Marathon Oil Corp. $1.8 billion for a stake in an Angolan oil field, the Wall Street Journal reported earlier this month, citing unidentified people familiar with the negotiations.

To contact the reporter on this story: Wang Ying in Beijing at wang30@bloomberg.net.

Last Updated: October 21, 2008 06:35 EDT