China sets up new oil group to meet demands
Moving to meet soaring domestic demand, China has set up a new oil company licensed to handle exploration, development and refining, officials and reports said Friday.
An official at the Shaanxi provincial State-owned Assets Supervision Administration, the government agency in charge of state companies, confirmed that the company was launched recently.
With demand for crude oil soaring as China's economy roars ahead at a growth rate of more than 9 percent annually, China has stepped up efforts to locate and tap its domestic reserves.
Shaanxi Yanchang is a major provincial refiner that is being joined with upstream producers in an attempt to build a competitive new company.
Shaanxi is China's fourth largest oil producing province, with crude output reaching more than 90 million barrels in 2004.
China maintains state control of its strategically important oil and gas companies, with the other major producers ¡ª China National Petroleum Corp., China Petrochemical Corp. and China National Offshore Oil Corp. ¡ª accounting for almost all production.
However, in Shaanxi, a small private oil exploration and exploitation sector developed, aided by local officials eager to boost the impoverished regional economy.
Those private companies, outlawed by the central government, have been absorbed by Shaanxi Yanchang Petroleum, state media reports say.
The Shaanxi state assets administration official said the value of Shaanxi Yanchang's assets was still being evaluated.
According to a recent report in the Shaanxi Daily, Yanchang Petroleum Industry Group Corp., the flagship company of the new conglomerate, produced 13.5 million barrels of crude oil last year, excluding output by smaller companies in the first seven months of this year, up 25 percent from the same period a year earlier.
Its refinery output was 32.2 million barrels, up 20 percent year-on-year. Its
sales surged 58 percent on-year during the same period to 15 billion yuan ($1.9