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China sets up new oil group to meet demands
(AP)
Updated: 2005-09-17 09:58
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.
Chinese employees
of China National Petroleum Corp. (CNPC) work at Tarim Oil Field, a branch
company of CNPC, in northwest China's Xinjiang Uygur autonomous region in
this October 10, 2004 file photo.
[Reuters] | State-owned Shaanxi Yanchang Petroleum
Group Co. was formed by merging 21 exploration and development companies and
three refineries, state media reports said. The reports said the company will be
China's fourth-largest oil company.
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 — China National Petroleum Corp.,
China Petrochemical Corp. and China National Offshore Oil Corp. — 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
billion.)
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