Fortune Oil expects double-digit growth in both revenue and profit this year on booming demand from China, the world's largest energy consumer, and the company will look to buy more natural gas assets. Fortune Oil, which recently bought a stake in three iron ore mines in Armenia, is scouring the globe from Mongolia to Indonesia and South Africa, Chief Financial Officer Premal Shah told Reuters.
It also recently bought a stake in a pipeline in China that will start supplying natural gas from next year, and expects it to reach full capacity by 2013. "I'd say the key opportunities for us to pursue are in the natural gas area because it's well known China has ambitions to increase its usage of natural gas in terms of its total energy mix," Shah said in a telephone interview. China's state energy firms have since 2010 embarked on a spree of gas asset buys to help fuel growth in the world's second-largest economy. China aims to triple the use of the lower-carbon fuel in the next decade.
Shah said Fortune Oil would use existing cash of 29 million pounds ($48 million) and a new $180 million loan facility to fund acquisitions, and would raise funds from the market if needed. The company plans to invest $500 million in Armenia's iron mining industry, and had looked at other potential buys.
Fortune Oil, which in December said it could attract the interest of oil majors like Shell and Total, given its position in China, currently has no plans to sell any of its assets, Shah said. Earlier on Thursday, the company reported a higher profit driven mainly by a strong performance from its natural gas and aviation refuelling businesses, and said it would pay a maiden dividend of 0.13 pence a share.
January-December pretax profit was 26.1 million pounds, up from 18.1 million pounds a year ago. Revenue jumped 40 percent to 567 million pounds. Hong Kong-based Fortune Oil's shares, which have risen by almost two-thirds in the past year, were up 8.2 percent at 13.25 pence at 1230 GMT on Thursday on the London Stock Exchange.
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