China Petroleum and Chemical Corporation (Sinopec), one of the country's major onshore oil producers, signed a framework agreement with China Resources Enterprise (CRE) to take over its petroleum and gas distribution services in Hong Kong, said Sinopec on Thursday.
Sinopec will acquire all the petroleum distribution business of CRE in Hong Kong, including the wholesaling of petroleum products and 20 gas station for four billion HK dollars (about 0.51 billion U.S. dollars), according to the agreement.
Both parties expect to ink a formal agreement in April following approvals from relevant authorities with an intention of completing the transaction by June 30.
In its effort to focusing on consumer products, CRE disposed of its equity in Dongguan China Resources Petrochems to Sinopec at the end of 2005, and sold its petrochemical services business on mainland China to its parent company China Resources Group in October last year.
The current deal is seen as a milestone in the company's progressive transformation into a pure consumer company, and will conclude the restructuring of the company's petroleum distribution business, said Song Lin, Chairman of CRE, in the announcement of the deal.
Sources with Sinopec said the deal would add another 20 petrol stations to the more than 10 that are operated in Hong Kong.
China Resources Petrochems is a subsidiary of China Resources Group, the controlling parent company of Hong Kong- and London-listed CRE, specializing in the import and export, storage, and retailing of petroleum and chemical products with a 25 percent market share in Hong Kong.