China National Offshore absorbs distribution unit
China National Offshore Oil Corp, parent of dominant offshore oil and gas producer CNOOC, has absorbed distribution outfit China National Chemical Supply & Sales as part of the government's strategy to reduce the number of state-owned enterprises and bolster competitiveness.
The combination will strengthen China National Offshore's capability in chemicals distribution, a missing link in the oil major's supply chain as it seeks to become a fully-integrated energy and chemical company.
State-owned Assets Supervision and Administration Commission had transferred its ownership in China National Chemical to China National Offshore which became the latter's wholly owned subsidiary, China National Offshore said.
This has cut the number of state-owned enterprises directly administered by Beijing to 158. The central government plans to cut it to 100 by 2010 and ultimately to 80.
Set up in 1956, China National Chemical had 2.39 billion yuan of assets at the end of last year. It focuses on the trading, storage and transportation of chemical products.
A China National Offshore spokesman said China National Chemical booked a net profit of just over 40 million yuan last year.
It has a sea terminal capable of handling 40,000-tonne vessels carrying liquid chemicals and liquid petroleum gas, 116,000 cubic metres of storage facilities and 214,600 square metres of warehousing space.
'We still have some shortcomings in our supply chain, especially in the sales network,' China National Offshore president Fu Chengyu said. 'China National Chemical's reputation and network will be a good supplement to our operation.'
China National Offshore completed a US$4.3 billion petrochemical plant in Huizhou, Guangdong province, a year ago in a joint venture with global oil giant Royal Dutch/Shell Group, and is scheduled to start up a US$2.5 billion wholly owned oil refinery adjacent to the plant.
To tighten its grip on the distribution of fuel from the refinery, China National Offshore is in talks to buy more fuel stations in Guangdong, after winning a bid early last year to buy more than 50 per cent of privately held Shanghai Xingchen which operates 20 outlets in Shanghai.
A spokesman declined to comment on reports the company aims to build a retail chain of 300 stations.
Trimming down
The central government plans to cut by 2010 the number of state-owned enterprises administered by Beijing to 100
