China Mulling Mergers Among State Oil Companies?

China's government is said to be exploring ways to consolidate the country's oil industry to create new national champions and operate more efficiently as prices slide.

According to the newspaper Wall Street Journal, quoting sources, one option under consideration would combine China National Petroleum Corp (CNPV) and its main domestic rival, China Petrochemical Corp (Sinopec). Others could include merging two other major energy companies, China National Offshore Oil Corp (CNOOC) with the Sinochem Group.

No timetable evidently has been set for a decision on whether or when to proceed with any merger. The companies up to now have been mute on the subject.

The mergers would be the latest consolidation of Chinese state companies as the government tries to regear a slowing economy. As part of that effort, President Xi Jinping is trying to revamp major state firms to make them more competitive globally, WSJ notes.

Mergers could also boost efficiencies in an economy increasingly burdened by excess capacity, observers say - a problem that has caused Chinese manufacturers to compete against each other by cutting prices.

With international oil prices plunging, those problems have become more pronounced. Combining and then streamlining the operations of the major Chinese oil producers could help reduce waste caused by redundant staff and projects, the newspaper quotes officials as saying.

CHEManager Spotlight

Standardization and Harmonization of Digital Chemical and Pharmaceutical Logistics
Creating Interfaces

Standardization and Harmonization of Digital Chemical and Pharmaceutical Logistics

CHEManager Spotlight is an exclusive event tailored for practitioners and decision-makers in the chemical industry. This part of our event series delves into the latest trends and innovations in logistics to streamline your operations and drive efficiency.

Interview

Specialty Chemicals in a Shifting World
Adapting to Tariffs and Strengthening Regional Networks

Specialty Chemicals in a Shifting World

Jennifer Abril, President & CEO of SOCMA, discusses the impact of new tariffs and the importance of regional supply networks in the specialty chemical industry.