CNPC to spin-off in oilfield services
HOUSTON, February 24, 2016 – China National Petroleum Corporation intends to join its competitors in the oilfield services sector, the chairman of the state-owned energy firm, Wang Yilin, said at a global energy conference in Houston.
The company is thinking of making its oilfield services business public in an effort to be more profitable in the downturned market. Details on timing and figures were not mentioned.
This follows Chinese President Xi Jinping’s attempts to revamp the country’s energy industry as low oil prices cause the world’s second-largest economy to take a dive in growth. State-owned PetroChina recently put a number of pipeline operations into a single company and fellow government-run China Chemical & Petroleum Corporation moved to sell USD 17.4 million worth of stakes in its retail unit in September 2014.
“This reform follows on from CNOOC [China National Offshore Oil Corporation] and Sinopec, who have partially spun off their oil services divisions,” said Neil Beveridge, an analyst at US’ global management assessment firm Sanford C. Bernstein. “However, with the severe downturn in the industry and low valuations, the timing is not good.”
China National Petroleum Corporation, the country’s biggest oil and gas producer, reported revenue of USD 16.8 billion from its construction engineering, engineering technology and equipment manufacturing divisions in 2014.