China’s First Foreign-Invested Refined Oil Company Lands in Fujian Province, Southeast China

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Researched by Industrial Info Resources (Sugar Land, Texas). Sinopec SenMei (Fujian) Petroleum Company, Limited, a joint venture between Exxon Mobil (NYSE:XOM), Saudi Aramco (Dhahran, Saudi Arabia) and Sinopec (Beijing, China), officially landed in Fuzhou city, capital city of Southeast China's coastal Fujian province on May 14, according to the Ministry of Commerce of China.

Sinopec SenMei (Fujian), which gained approval from the Ministry of Commerce of China as early as March, is China’s first foreign-invested refined oil company. It has a total investment of $600 million with a registered capital of $240 million. Its businesses cover oil refining, petrochemicals and fuels marketing. According to a senior Sinopec executive, Sinopec SenMei (Fujian) will also take over Sinopec's fuel station business in Jianxi province (Central China) and Hunan province (South China) besides those in Fujian.

Sinopec’s (NYSE:SHI) businesses cover upstream, midstream and downstream operations. It is a publicly listed company not only in Shanghai, but also in Hong Kong, New York and London. By the end of 2006, Sinopec’s number of shares totaled at 86.7 billion. Wholly state-owned China Petrochemical Corporation is Sinopec’s biggest stakeholder.

Saudi Aramco is the world’s biggest oil and gas producer and is a company wholly owned by the government of Saudi Arabia. In response to the rapidly growing demand of crude oil and petrochemicals from the Asia Pacific region, Saudi Aramco has taken a series of actions including the establishment of an office in Shanghai.

Exxon Mobil, ranking the first among the world’s top 500 companies in 2006, started to develop business in China in the 1990s. It now has one subsidiary in Beijing, two in Shanghai and one in Guangzhou.

China’s refined oil industry opened its market to the outside world on December 11, 2006 in accordance with China’s commitment to WTO. This new open market entitles foreign investors access to both retail and wholesale refined oil in China. Before that, Sinopec and China National Petroleum Corporation (CNPC) were the only two major players in China’s domestic refined oil market.

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