Asia's largest oil refiner Sinopec aims to use part of $17.5 billion in proceeds from a stake sale to boost shale gas production and lower debt.
HONG KONG, Oct 31 (Reuters) - Asia's largest oil refiner Sinopec Corp, which on Thursday posted a 12 percent fall in quarterly earnings, aims to use part of $17.5 billion in proceeds from a stake sale to boost shale gas production and lower debt.
Sinopec unveiled a plan in September to sell the stake in its retail business, marking China's biggest privatisation push since President Xi Jinping came to power almost two years ago.
Chen Yang, head of Sinopec's investor relations, said in a conference call with analysts on Friday that the state-run oil company planned to use the proceeds partly to boost shale gas production, pay down debt and supplement working capital, according to people who joined the call.
Chen's comments provide some clarity on how Sinopec plans to spend the cash. Chai Zhiming, deputy chief executive of Sinopec's retail unit, told Reuters in September that it will use part of the proceeds to optimise its retail fuel business, boost non-fuel sales and pay down debt.
China, believed to hold the world's largest technically recoverable shale resources, is hoping to replicate the shale boom that has transformed the energy landscape of the United States.
Output at Sinopec's Fuling shale gas field in the southwestern province of Sichuan - China's first major shale project - had hit 3.2 million cubic metres per day at end-June.
The Fuling field, with estimated reserves of 2.1 trillion cubic meters, will reach an annual capacity of 5 billion cubic metres by end-2015, and the capacity should double by the end of 2017, Sinopec chairman Fu has said.
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