China's largest oil company, PetroChina, plans to use part of the $38 billion it will receive for the sale of a series of pipelines to start businesses focused on wind and solar power.
According to Wei Fang, director of investor relations, the company will use some of the resources for the "transformational development of the company into a green, low-carbon model." In addition, the money will also be spent on dividends, debt payments and investments in the oil and gas division.
PetroChina expects the new lines of business to bring returns on equity above the 7% to 9% that its pipeline segment was recording, said Dennis Ip, an analyst at Daiwa Capital Markets, in a July 24 report.
According to an announcement made last Thursday, the company will receive 268.7 billion yuan in cash and equity interest for the delivery of its pipeline networks, storage and import terminals as part of the creation of national pipeline giant PipeChina.