Total in Talks with PetroChina to Sell China Refinery Stake
BEIJING, July 2 (Reuters) – France's Total is in talks with PetroChina to sell its stake in a Chinese refinery after nearly two decades of investment, in what could be the latest foreign energy firm giving up on a vast but tightly regulated oil market in China.
Early this year, sources said BP was dropping plans to invest in another PetroChina refinery in southern China, mirroring the moves of several other projects that worried about a slowdown in growth in the world's second-largest economy.
Total was the first foreign firm to get a toehold in China's refining business, as an investor in the 200,000 barrels-per-day West Pacific Petrochemical Corp (WEPEC) in the northeastern port city of Dalian in the mid-1990s. The plant was then designated as the country's first and only export-oriented refinery.
The French firm owns 22.4 percent of the plant which started operations in 1996. It's jointly owned by state-run Sinochem Corp and firms backed by the Dalian city government, but PetroChina manages and operates it.
Industry officials familiar with WEPEC's operations said the French firm has decided to divest the refinery stake due to years of losses the plant incurred, and also due to lack of access to the local Chinese market.
"Exports of most of WEPEC's fuel are making losses, due to heavy taxes levied," said an industry official with direct knowledge of WEPEC's fuel marketing.
"Now it's time to revamp the plant as facilities are old, to produce cleaner fuels. And that requires new investment from investors, I believe the French could not stand it any more," the industry official said.
A Total spokesman in China was not immediately available for comment.
PetroChina has held talks with Total on the potential purchase of the latter's stake in WEPEC, PetroChina's parent company China National Petroleum Corp (CNPC) said on Wednesday.
PetroChina President Wang Dongjin met a Total vice president on Tuesday, CNPC said on its website (news.cnpc.com.cn).
"Both sides exchanged views on domestic and overseas upstream projects and a stake transfer in the WEPEC refinery," it said.
(Editing by Muralikumar Anantharaman)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Blockchain Demands Attention in Oil and Gas
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- CNPC Opens Sea-Land Oil Storage and Transport Facility in Bangladesh
- US Govt Makes Record Investment of $6B for Industrial Decarbonization
- Perenco Still Searching for Missing Person After Platform Incident
- Eni, Fincantieri, RINA Ink Deal on Maritime Decarbonization
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Oil Falls as US Inventories Increase
- Czech Utility CEZ Bucks Weaker Prices, Demand to Log Record Annual Profit
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call