Sinopec Group to focus on overseas acquisitions

05-Jan-07

China's second-largest oil company by assets -China Petrochemical Corp., also known as Sinopec Group will step up efforts to acquire more oil and gas fields in China and overseas, and will also aggressively bid for exploration projects in oil-rich regions. The company plans to boost upstream output by 30% by 2010 as part of its five-year plan. Expectations of higher oil prices this year, have prompted the company to expand its upstream segment at a faster rate than its downstream operations. This can help contain costs, as the company can supply feedstock to its own refineries at a cheaper rate than if it buys crude oil on the international market. Annual production capacity of ethylene in the Pearl River Delta region grew in 2006. This increase came from an upgrade of an ethylene plant in Maoming city and the opening of a refinery in Hainan, which has an annual processing capacity of 8 million tons. By 2009, one of its units, Sinopec Zhenhai Refining & Chemical Co., will have an annual processing capacity of 20 million tons of crude and an annual ethylene production capacity of 1 million tons. The company also plans to invest CNY53.7 billion to build ethylene plants in Tianjin, Zhenhai, and Guangzhou, and a xylene plant in Nanjing.