Sinopec Reshuffles AssetsSinopec Group, China's second largest oil conglomerate, will transfer more petroleum and petrochemical assets into its listed vehicle Sinopec Corp in the next five years.The move is to help the overseas listed Sinopec Corp grow into a world leading energy company and to better the assets structure of the parent company. Sinopec Group said it is expected to transfer the oil company, Sinopec National Star and other petrochemical companies into the listed company ``at a right time", in a bid to reinforce its profit-making ability. Earlier in April, Sinopec Corp said that it is expected to issue up to 3 billion A shares at the Shanghai securities exchange this year to raise 10 billion yuan (US$1.2 billion), and net proceeds therefrom would be used to fund its purchase of Sinopec National Star, and refined products and crude oil pipelines in southern and eastern China. Sinopec National Star, the nation's fourth largest oil company which was allocated by the government to the group last year, enjoys oil reserves of 150 million tons. If the acquisition goes ahead, the refinery-heavy Sinopec Corp is estimated to increase its oil and gas reserves by 30 per cent. Li Yizhong, general manager of the group, urged the listed company to further sharpen its competitiveness through assets reshuffle, to stand up tough challenges after China's entry to the World Trade Organization (WTO). Li said the listed company is to maintain its annual oil production of 40 million tons by 2005, and to greatly promote its annual gas production to 10-12 billion cubic metres from current 3.9 billion cubic metres. Its sales of refined oil products would reach 90 million tons from current 70 million tons, accounting for three fourths of the market in southern and eastern China. The group would also completely shrug off its social functions, such as schools and hospitals, to operate as a market oriented oil company. To slash the group's production cost, Li pledged to beef up the technology innovation and to utilize information technology to upgrade the production and management. In the coming five years the group plans to streamline its workforce by 180,000 from current 1.2 million. ``Through these efforts, we are confident to see the unlisted assets generate profits with government support," Li said. Sinopec Group holds 56.9 per cent in the stake of Sinopec Corp, which was listed on the stock markets in Hong Kong, New York and London last October, raising US$3.46 billion. |
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