Jilin Hongyuan puts off sale to raise US$150m
Jilin Hongyuan Petroleum Development, which recently obtained Beijing's approval to tap foreign capital on the domestic markets, will launch its B-share sale next year in light of the market conditions, sources say.
The company, which has the biggest oil-reserve potential in eastern China, aims to raise about US$150 million by selling about 200 million Shenzhen B shares.
Sources said the prevailing stock market downturn did not favour the company's listing. It is the first mainland oil producer to go public.
The Shenzhen B-share index has fallen 46 per cent since May, while the Shanghai B-share index is off 42 per cent from its May peak.
Jilin Hongyuan is among the second batch of firms allowed to issue and list foreign B shares on the domestic stock markets.
Northeastern Jilin province has 81 oil fields, with two in production under Jilin Hongyuan, according to sources. Oil reserves of the two fields are estimated at 3.4 billion tonnes. Assets that would be included in the listing portfolio were four oil-field production units, sources said.
Its parent, Jilin Oil Group, controlled by the Jilin provincial government, will retain some production units, along with oil exploration, oil refining and logistics research work.
It is understood the group has annual output of five million tonnes of crude oil, supplying to heavy industrial companies such as H-share Jilin Chemical.