Sinopec Group may inject only as much as half of its global oil and gas reserves into Sinopec Corp as it holds on to assets in volatile countries such as Syria, far from enough to cut the unit’s exposure to unprofitable refining at home. Fu Chengyu, who became Chairman of both companies a year ago, said last month that China’s largest refiner was seeking to buy more overseas upstream assets from its parent to boost oil and gas production and counter mounting losses from selling petrol and diesel at state-controlled prices. Sinopec Group has spent at least USD32 billion buying global assets in the past three years, including the USD7.24 billion purchase of Swiss explorer Addax Petroleum in 2009 to gain access to fields in West Africa and Iraq’s autonomous Kurdistan region. It was China’s biggest overseas acquisition. At least half of the group’s overseas assets are in countries such as Syria, Argentina and Russia, where the reserves are either of poorer quality, too small or in areas fraught with high political risk, analysts say. “They will inject the ones that are not contentious. So they are not going to inject Syria, Iran and all of that,” said an energy banker with an international bank in Hong Kong. Sinopec made its first, and so far only, acquisition of overseas upstream assets in 2010 when it bought deepwater oilfields in Angola from its parent for USD2.46 billion. The parent’s assets in North America, Brazil and Australia, and some of the assets held by Addax, may be targeted first, said Scott Darling, Director of Barclays Capital’s Asia oil and gas research. The assets may boost Sinopec’s oil and gas production by 40% to about 1.5 million barrels per day (BPD). Sinopec Group holds around 2.2 billion BOE of overseas proven reserves. Sinopec reported net profit growth of 2% last year, lagging behind the 29% gain posted by Chinese offshore oil producer CNOOC, which does not refine crude oil. Sinopec had a refining loss of USD5.9 billion in 2011 as increases in state-regulated fuel prices failed to keep pace with gains in world crude prices. Refining and sale of oil products accounted for 59% of Sinopec’s operating revenue last year. Sinopec’s 2011 oil and gas output was only a third of PetroChina’s 1.29 billion BOE, while its refining capacity of 4.4 million BPD is about 60% bigger than PetroChina’s 2.7 million BPD, the South China Morning Post reports.