China to have first private oil group
China's big private oil and gas enterprises will unite to organize a group corporation to strengthen their competitiveness, said sources Tuesday with the China Chamber of Commerce for Petroleum Industry (CCPI) of All-China Federation of Industry and Commerce.
Wang Yong, secretary-general of the chamber, said that the corporation, integrating well-performing assets of big private enterprises in petroleum and gas industries, will form a complete petroleum industrial chain covering fields from mining, refinery to sale.
"The goal is to obtain more policy supports from the government for China's private oil and gas enterprises and to enhance the oil supply security of the country," said Wang.
Wang said that the corporation, named Changcheng or Great Wall, will try to get listed overseas after the establishment.
According to Wang, there are over 80,000 private oil and gas enterprises with about one million employees in China.
Most in refinery and sale fields and mainly medium and small-sized ones, those enterprises boast an industry value of about one trillion yuan (US$120.8 billion) and most are well-performing assets.
There are over 40,000 private gas stations in China, covering 53 per cent of the total. Private oil refineries, distributed in more than ten provinces of the country, boast an annual refining capacity of nearly 100 million tons. And the annual storage capacity of those private enterprises amounts to 30 million tons with an annual sales volume of over 100 million tons, said Wang.
Some powerful enterprises have risen in recent years. Among them, over 1,000 each have assets of more than 100 million yuan (US$12.1 million), hundreds each have assets of over one billion yuan (US$121 million) and more than 20 each have assets of over 10 billion yuan (US$1.21 billion).
In China's petroleum industry, monopolized to a considerable extent by large state-owned enterprises, more admissions to the market have become available to private enterprises in recent years.
Since 2004, a total of 49 non-state-owned enterprises, mostly privately owned, got licenses from the Ministry of Commerce to import crude oil or oil products.
According to the guideline for boosting development of the country's private economy released by the State Council on February 24, private capital will now be allowed to enter sectors and fields not specially banned by laws and regulations. This means that many sectors that are inaccessible to private capital including power generation, telecommunications, railway, civil aviation and oil, will be open to them now.
As the first response to those moves, over 100 private oil and gas enterprises initiated and established the CCPI last December.
According to China's commitments to the World Trade Organization (WTO), China will open its oil products wholesale market to foreign capital in 2006. And the country has just opened its oil products retailing market to foreign capital on Dec. 11 2004.