Honghua Group Becomes Limited Partner of Sino-Mex Energy Fund
soruce：manager click：6294 time：2014-11-14
Honghua Group Limited (HKEx stock code: HK0196, hereinafter called “Honghua Group”) – the world’s largest manufacturer of land drilling rig – announced on November 13, 2014 that it has committed to invest USD 150 million in Sino-Mex Energy Fund and becomes a limited partner of the Fund. The Sino-Mex Energy Fund will mainly invest in projects in energy infrastructural facilities, exploration and production of oil and natural gas area.
China and Mexico government pay high attention to Sino-Mex Energy Fund. On the same day, Chinese President Xi Jinping and his Mexican counterpart Enrique Pena Nieto had meetings, China and Mexico announced “Outline of Promoting Comprehensive Strategic Partnership between People’s Republic of China and The United States of Mexico”. Article Eleven defines that “Both sides stress taking following actions to promote mutual investment”. “(4) Promote investment in energy sector. Make good use of energy fund to support investment and financing cooperation on infrastructural facilities projects between Chinese enterprises and PEMEX”.
One of the limited partners in the Sino-Mex Energy Fund, P.M.I. Holdings B.V. is a subsidiary of PEMEX. The latter is a holding company which manages petroleum, natural gas and basic petrochemical interests of the Mexican government, and also the second largest industrial enterprise in Latin America. P.M.I. Holdings B.V. will subscribe to the Fund and will partner with Chinese enterprises through the Fund. The Fund is at once a result of Mexico’s energy reform and an important showcase of Sino-Mexican collaboration in the energy sector.
Energy reform and related investments in Mexico have been put in place by the Mexican government through the announcement of “National Energy Strategy 2014-2028)” and “2014-2018 Planning of National Infrastructural Facilities”. Energy reform will not only become a powerful economic growth point but will bring significant investment opportunities for Mexican and foreign enterprises. According to data of Energy Information Administration of the United States, the Gulf of Mexico is the largest petroleum belt yet to be developed next to the Arctic Circle. In the future Mexico looks set to be a top five petroleum producing nation, up from her current position of ninth place.
After the reform, Mexican energy sectors shall officially open to private and foreign investment, involving electric power and renewable resource fields, and oil and gas field exploration, production, refining, transportation and storage etc. The representatives of many Mexico enterprises association had predicted, energy reform is expected to attract additional USD 20 billion foreign capital a year to enter the sector.
Honghua Group’s participation in the Sino-Mex Energy Fund enables the company to have an opportunity to procure orders for land drilling rigs and offshore platforms from Mexico and relevant businesses. It will also facilitate the Group’s product layout and sales in the Mexican and North American markets. As a limited partner of the Fund, Honghua Group will have positive opportunities to obtain orders from PEMEX for land-based drilling machines and modular drilling machines purchased from the Fund, as well as land and marine equipment such as offshore drilling platform, offshore drilling package and marine-support ships.
About Honghua Group
Honghua Group is the world’s largest manufacturer of land-based drilling equipment, and mainly manufactures high-end and large-scale land boring drills as well as accessories and spare parts. By virtue of its powerful research and development capabilities, quality production equipment and mature international sales network, about 80% of its products are exported to North America, South America, Middle East, Russia, India and Africa etc. In 2014 Honghua received orders for offshore platform and began production at its marine equipment production base in Qidong, Jiangsu province. The Group will leverage on its existing foundation for land-based drilling equipment and implement diversified strategy. Its aim is to become a conglomerate for equipment manufacture, oil and gas resources development (in particular in the areas of non-conventional oil and gas) and engineering services covering both land and sea, with interactive development.
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