Sinopec shakes up global exploration and production unit to cut costs

Energy giant Sinopec Group is relocating nearly 40 per cent of its staff in its global exploration and production unit back to its headquarters, in a major shake-up aimed at cutting costs and boosting efficiency, company sources said.

The shift in emphasis, which has become more pronounced in recent months, has been partly triggered by Beijing's tough anti-graft campaign and also the slump in oil prices.

In April, the State-owned Assets Supervision and Administration Commission, the government regulator for SOEs, appointed seven audit companies, including international firm PwC, to look into the overseas assets of major state-owned enterprises as it tightens the reins on the business giants. It was the first time that the state asset regulator had investigated offshore assets and followed state media calls in March for the authorities to assess the trillions of yuan in these firms' offshore holdings.

The country's state oil giants have also since last year been trying to focus on ensuring better returns on foreign investments after a wave of expansion in recent years.

China's second-largest energy group, which in late 2013 surprised the market by putting up for sale shale gas assets in Canada, might also look to offload more "non-core" assets, the senior company sources said, without elaborating.

Sinopec International Petroleum Exploration and Production Corporation previously employed just under 700 staff managing dozens of global projects.