Sinopec and Shell Agree on Oil Joint Venture in China

Home>>Business

Last updated at: (Beijing Time) Saturday, July 20, 2002

Sinopec and Shell Agree on Oil Joint Venture in China

DISCUSSION

CHINESE

SEND TO FRIEND

Sinopec, China's second largest oil company, and Royal Dutch/Shell Group, Friday agreed to invest 1.55 billion yuan (US$187.4 million) in a joint venture to build gasoline stations along the east coast of China.

The later-than-expected agreement, which still needs to be finalized, will give Shell a foothold to crack open China's lucrative retail market for refined oil products before the market is completely open to foreign companies in two years' time.

The joint venture aims to build 500 petrol stations during the next three years in East China's Jiangsu Province, Sinopec said in a statement.

It did not say the percentage share Shell and Sinopec will have in the joint venture.

Similar to the deal, Sinopec has also agreed with BP and ExxonMobil to each operate 500 stations in East China's booming Zhejiang and Fujian provinces within three years, as part of the deal for the world's three largest oil companies to back Sinopec's overseas listing in 2000.

Earlier in June, Sinopec said its joint venture with BP will cost US$254 million. Sinopec controls 60 per cent of the joint venture, while BP holds the rest in the "initial operation period."

Sinopec and Shell are now waiting for approval from the State Council before they can form a joint venture company.

Sinopec sold 67.7 million tons of refined oil last year, or 65 per cent of the nation's total consumption. The company, along with PetroChina - the nation's largest oil company - controls half of the petrol stations; the rest owned by private companies or local governments.

Earlier, Shell's officials said the company is to invest around US$100 million to US$200 million in petrol stations in three to five years, pending on the pace of the opening up of the market and implementation of the alliance with Sinopec.

Questions?Comments? Click here

Sinopec, Shell Cooperate on New Project

How to View Major Problems in China's Income Distribution System ( 90 Messages)

Taiwan to Lift Half-century Ban on Direct Investment in Mainland ( 132 Messages)

Sino-Russian Military Exercise not Targeting Third Country ( 205 Messages)

China's Economy Grew 7.8 Percent in First Half Year ( 13 Messages)

Gang of 66 Criminals Get Heavy Sentences ( 40 Messages)

Shanghai Plans Asia's Biggest Shopping Center ( 176 Messages)