China energy giant Sinopec denies merger plans

GMT 09:07 2015 Thursday ,26 February

Arab Today, arab today China energy giant Sinopec denies merger plans

Chinese oil giant Sinopec
Shanghai - AFP

Chinese oil giant Sinopec has denied reports the government plans to merge the firm with another domestic energy behemoth, China National Petroleum Corp (CNPC), the official Xinhua news agency said Thursday.
The Wall Street Journal reported last week that China is exploring ways to consolidate its oil industry with a merger between the two state-owned companies -- which share some similar business areas -- one option under consideration. It quoted officials with knowledge of the matter.
"We have never heard any internal talk about the case," Xinhua quoted a spokesman for Sinopec, known in full as China Petrochemical Corp, as saying.
The spokesman could not be immediately reached for comment.
Another option being studied is a merger between CNOOC, China's main offshore oil and natural gas producer, with petrochemical company Sinochem, the Wall Street Journal said.
An industry official did tell Xinhua that the government is planning structural reforms to the energy industry this year, without going into detail.
"The reform plan will be released as early as the first half of this year and will have significant impact on the current oil and gas system," said the official, who Xinhua did not name.
Separately, the Global Times newspaper reported on Thursday that chances of a merger between Sinopec and CNPC were "very slim".
The speculation comes ahead of the annual meeting of the National People's Congress, China's Communist-controlled legislature, which has been used in the past to launch economic reforms.
The ruling party has pledged to allow the market to play a "decisive" role in the allocation of resources, including by pushing state companies to operate on more commercial terms.
A unit of Sinopec last year announced plans to sell a 30 percent stake in its marketing arm to outside investors for more than $17 billion.
An arm of CNPC -- China's largest oil and natural gas producer -- has unveiled plans to spin off part of its pipeline business.

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