Sinopec outbids PetroChina in $2b battle for prized refinery operation

Sinopec Group, parent of H share China Petroleum & Chemical (Sinopec), has outbid PetroChina for the 2.2 billion yuan (about HK$2.07 billion) acquisition of a medium-sized oil refinery in south China.

The acquisition has dashed PetroChina's hope of gaining control over what would have been its first refinery asset in the lucrative south China market and cemented Sinopec Group's position as the dominant refiner in the region.

A Sinopec spokesman yesterday confirmed its parent had acquired Dongxing Refining & Chemical, in the coastal Zhanjiang city of Guangdong province, but said he could not confirm other details.

An industry source said the acquisition would cost 2.2 billion yuan.

Dongxing is a Sino-Hong Kong joint venture whose refining facilities were built about a decade ago. It employs about 500 workers.

PetroChina had wanted to buy Dongxing for two billion yuan, the official newsletter China OGP reported in early January.

The move was seen as an effort to cut transport costs and better compete with Sinopec, which dominates the refining sector in southern and eastern China, the mainland's most lucrative consumer markets.