SINGAPORE (ICIS)--China Petroleum & Chemical Corporation's (Sinopec's) board of directors has unanimously agreed to restructure its oil product marketing segment and introduce social and private capital to diversify ownership, the refiner said on Wednesday.
The restructuring will be based on the results of audits and valuations to be conducted on current assets and liabilities of the marketing segment, it added.
The shareholding percentage for social and private investors will be determined according to market conditions, Sinopec said.
The company’s board authorised the chairman to take the following actions under the circumstance that the shareholding percentage of social and private investors does not exceed 30%.
Sinopec said this was done in order; to determine the investors, their shareholding percentages and the terms and conditions of their participation in the marketing segment and to organise the implementation of the plans for such participation; and to sign transaction documents and other relevant documents and to attend to the approval, registration, filing and disclosure procedures in relation to the aforesaid matters.
Sources within Sinochem and China National Offshore Oil Corp (CNOOC) said it was too early to tell how much the diversification of ownership will push the market to open up.
One source said the government may have pushed for restructuring to draw attention to how a level and efficient playing field can be formed in the market.
A source with the securities industry said: “Social and private investors may have a saying in the ownership level with capital, but it is not clear yet how they can get more saying in the market level.”
Such restructuring may attract more capital from outside the petroleum industry, which was a reason for Sinopec to open up the marketing segment rather than the upstream and refining sectors, said an industry source.
Up until 31 December 2012, Sinopec had 30,836 petrol stations, almost all operated by itself, the company’s annual report showed. The company’s refined oil sales volumes amounted to 173m tonnes in 2012, with retail accounting for 68%.
Sinopec has four business segments: exploration and exploitation, oil refining, marketing and distribution, as well as chemical.
Additional reporting by Li Li