Sinopec

China Petroleum & Chemical Corporation Limited
中国石油化工股份有限公司

Type	Public (SSE: 600028, SEHK: 0386, NYSE: SNP, LSE: SNP)
Industry	Integrated oil and gas
Founded	Beijing, China (2000 (2000))
Headquarters	Chaoyang District, Beijing, China
Key people	Fu Chengyu[1] (Chairman) Wang Tianpu (President)
Revenue	US$196.78 Billion (2009)[2]
Operating income	US$12.35 Billion (2009)[3]
Net income	US$9.035 Billion (2009)[3]
Total assets	US$128.42 Billion (2009)[3]
Employees	373,375 (2010)[3]
Parent	China Petrochemical Corporation
Website	english.sinopec.com

China Petroleum & Chemical Corporation Limited (中国石油化工股份有限公司), or Sinopec Limited (simplified Chinese: 中国石化; traditional Chinese: 中國石化; pinyin: Zhōngguó Shíhuà), is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong (HKEX: 0386) and also trades in Shanghai (SSE: 600028) and New York (NYSE: SNP).

Sinopec Limited's parent, Sinopec Group, is one of the major petroleum companies in China, headquartered in Chaoyang District, Beijing.^[4] Sinopec's business includes oil and gas exploration, refining, and marketing; production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemical products; storage and pipeline transportation of crude oil and natural gas; import, export and import/export agency business of crude oil, natural gas, refined oil products, petrochemicals, and other chemicals. In 2011 it ranked as the 5th largest company in sales in Forbes Global 2000.^[5][6]In 2009, it was ranked 9th by Fortune Global 500 becoming the first Chinese corporation to make the top ten and in 2010 it was ranked 7th.^[7] In 2007, it ranked first in the Top 500 Enterprises of China ranking.^[8]

Corporate history

Sinopec Limited was established as a joint stock entity under the China Petrochemical Corporation Group (Sinopec Group) in February 2000. The company was simultaneously listed in Hong Kong, New York, and London in October 2000. A Shanghai listing was completed in June 2001.

Given its legacy asset base from Sinopec Group, analysts have categorized it as a more downstream oil player than PetroChina.^[9] Sinopec is the largest oil refiner in Asia by annual volume processed. Sinopec produces around 1/4 as much raw crude oil as PetroChina, but produces 60% more refined products per annum.

In December 2006, Sinopec acquired the assets of Shengli Petroleum, whose main asset was a maturing domestic oil field, in order to stabilize its crude inputs and raise the utilization rate of its existing refineries.

Recent history outside China

Sinopec signed an evaluation deal with Gabon in 2004. During his African visit that year Chinese President Hu Jintao signed a series of bilateral trade accords with his Gabonese counterpart Omar Bongo, including a "memorandum of agreement aimed at showing the parties' desire to develop exploration, exploitation, refining and export activities of oil products". Three onshore fields were to be explored. One of the three blocks, LT2000, is some 200 kilometers (120 mi) southeast of Gabon's economic hub, Port Gentil, which lies south of the capital, Libreville, on the Atlantic coast. The other two - DR200 and GT2000 - are around 100 kilometres (62 mi) northeast of Port Gentil, according to the Gabonese oil ministry.^[10]

Sinopec's filling stations are a frequent sight on China's roads and rivers

Sinopec Corporation is a partner in Petrodar Operating Company Ltd., a consortium whose partners also include China National Petroleum Corporation (CNPC, the 90 per cent owner of PetroChina) and Sudapet (the Sudanese state-owned oil company), among others. In August, 2005, Petrodar commenced production of oil in blocks 3 and 7 in South-east Sudan. In December, 2005, Petrodar announced that its first shipment of crude oil would be shipped from Sudan in January, 2006. Petrodar's operations represent a major increase in overall Sudanese oil production. In West Africa, Sinopec is also looking at acquiring other petroleum companies. Sinopec completed a takeover of Calgary-based Addax Petroleum for $7.5 billion marking China's biggest foreign takeover. Sinopec is also looking into other companies such as ERHC Energy which has multiple oil block assets in the Joint Development Zone.^[11]

In November 2005, Sinopec Group announced plans to partner with CNPC to purchase an oil field in Sudan, and has reportedly indicated an interest in expanding its business in Sudan.^[12]

In 2007, in eastern Ethiopia’s Ogaden Desert, a raid by an ethnic Somali rebel group on a Sinopec drilling site left 74 dead including 9 Chinese oil workers, and 7 kidnapped on 24 April 2007. The rebels, the Ogaden National Liberation Front (ONLF), later released the seven abductees and warned foreign companies against working in the area. Sinopec said it had no plans to pull out of the resource-rich region despite the attack. Chinese Foreign Ministry spokesperson Liu Jianchao says that China strongly condemns the violent attack carried out by Somalian insurgents on the premises of the oil company Sinopec in Ethiopia.^[13]

In February 2007, Saudi Aramco and Exxon signed a deal with Sinopec to revamp the Fujian oil refinery and triple its capacity to 240,000 barrels per day (38,000 m³/d) by 2009. Aramco, Exxon and Sinopec also signed contracts for a fuel marketing venture that will manage 750 service stations and a network of terminals in Fujian province.^[14] Unipec, a subsidiary of Sinopec, signed a contract with French oil company Total Gabon in February 2002. Under the contract China, for the first time, bought Gabonese crude oil.^[15] In the African nation of Gabon, Sinopec's joint ventures in oil exploration have been accused of violating environmental conventions by the government of Gabon. Its activities in Gabon's national parks were suspended in September, 2006, by the Gabonese national parks council.^[16]

On April 13, 2010 the Company announced acquisition of Conoco Phillips's 9% stake in the Canadian oil sand firms, Syncrude, for $4.65bn. The deal was granted regulatory approval from the Canadian government on June 25, 2010.^[17]

On October 2011, the company has offered C$2.2 billion ($2.1 billion) to acquire Canadian oil and gas firm Daylight Energy.^[18]

Environmental record

In 2004, Sinopec prospected for oil in the 1,550 square kilometers of Loango National Park in southern Gabon and encountered criticism for what domestic and foreign environmental critics said were poor and damaging methods.^[19] Primatology professor Christophe Boesch of the US-based environmental organization, the Wildlife Conservation Society (WCS), criticized the use of dynamite and heavy machinery in exploration and road construction by Sinopec through park, noting that it might drive native Gorillas deeper into the jungle, where they would be outside legal restrictions on hunting.^[20] Gabonese law states that industries can extract oil from national parks, but must rehabilitate them to the prior condition. Boesch, and other international experts, have suggested that Sinopec use other methods such as horizontal drilling to minimize its environmental footprint.^[16] Sinopec's activities in Gabon's national parks were suspended in September, 2006, by the Gabonese national parks council.^[16] In 2007, Sinopec redid its earlier environmental study, this time in conjunction with the Gabonese environmentalist group Enviropass and the World Wildlife Foundation, winning high marks from Gabonese, Western, and Chinese conservation experts. Shortly thereafter, Sinopec resumed production with more environmentally friendly methods.^[21]

China's top environmental watchdog warned Sinopec in 2007 to stop operations at one of its oil fields due to chronic river pollution. Zhongyuan Oilfields Petrochemical Company, a unit of Sinopec, had failed to meet waste water treatment requirements and had been ordered to pay a pollution fine and operations had to be halted, according to the State Environmental Protection Administration (SEPA).^[22]

Guangdong Provincial Environment Bureau (GPEB had also issued a red sign warning to 19 companies, including Sinopec Guangzhou, in February 2008. By GPEB’s standard, the companies that have involved in excessive emissions or caused serious environmental pollution accidents will be given the red sign warning and will be placed under strict supervision.^[23]

On Wednesday, July 28, 2010, an explosion at an abandoned Sinopec plastics and chemicals factory in the Qixia District of Nanjing, China killed at least 12 people and seriously injured 15 more.

References

1. ^ Fu Chengyu, Chairman's Address, China Petroleum & Chemical Corporation, May 13, 2011.
2. ^ [1]
3. ^ ^{a b c d} http://english.sinopec.com/download_center/reports/2008/20090330/download/AnnualReport2008.pdf
4. ^ "Welcome to Sinopec." Sinopec. Retrieved on July 8, 2010. "Address: 22 Chaoyangmen North Street, Chaoyang District,Beijing, China"
5. ^ "The World's Biggest Public Companies". Forbes. http://www.forbes.com/global2000/. Retrieved June 6, 2011. 
6. ^ "Sinopec". Forbes. http://www.forbes.com/companies/sinopec-china-petrol/. Retrieved June 6, 2011. 
7. ^ "Global 500 2009: Annual ranking of the world's biggest companies from Fortune Magazine". CNN. http://money.cnn.com/magazines/fortune/global500/2009/. 
8. ^ http://kuching2.mofcom.gov.cn/aarticle/chinanews/200508/20050800287775.html
9. ^ Agencies (2009-09-26). "Quick facts: Petrochina vs. Sinopec and CNOOC". Chinavestor. http://www.chinavestor.com/knowledge-base/38-the-adr-market/70972-quick-facts-petrochina-vs-snp-and-ceo.html. Retrieved 2011-01-12. 
10. ^ Agencies (2004-02-04). "Sinopec signs evaluation deal for three oil blocks in Gabon". China Daily. http://www.chinadaily.com.cn/en/doc/2004-02/04/content_302948.htm. Retrieved 2007-02-05. 
11. ^ 11
12. ^ http://finance.yahoo.com/news/Addax-Petroleum-announces-cnw-268197338.html?x=0&.v=1
13. ^ China condemns raid on Sinopec oil field in Ethiopia | Radio86.co.uk
14. ^ [2]^{[dead link]}
15. ^ China's Sinopec, Total Gabon Sign Oil Deal
16. ^ ^{a b c} Alfoy, Philippe (2006-09-29). "China's Sinopec 'illegally' destroying Gabon". Business in Africa online. http://www.businessinafrica.net/news/west_africa/789099.htm. Retrieved 2007-02-05. 
17. ^ "Canada clears Sinopec to buy Syncrude stake"
18. ^ "Sinopec makes C$2.2bn bid for Canada's Daylight". October 10, 2011. http://www.moneycontrol.com/news/world-news/sinopec-makes-c3622bn-bid-for-canada%60s-daylight_596261.html. 
19. ^ "Sinopec, Total Gabon sign deal". cei.gov.cn. 2004-02-04. http://www.chinadaily.com.cn/en/doc/2004-02/04/content_302948.htm. Retrieved 2007-02-05. 
20. ^ Haslam, Chris (2006-10). "Oil prospecting in Gabon". Wildlife Extra.com. http://www.wildlifeextra.com/gabon-oil.html. Retrieved 2007-02-05. 
21. ^ Haslam, Chris (2009-10). "Gabon/DRC: Chiense companies in the extractive Industries". AfricaFiles. http://www.africafiles.org/article.asp?ID=22345. Retrieved 2011-01-12. 
22. ^ http://uk.reuters.com/article/oilRpt/idUKHKG702120070704 “Sinopec punished for water pollution”. Reuters.com. Jul. 4, 2007. Thomson Reuters. Retrieved on 10 May 2008.
23. ^ http://www.chinacsr.com/2008/02/05/2086-sinopec-guangzhou-receives-warning-for-pollution/ “Sinopec Guangzhou Receives Warning For Pollution”. ChinaCSR.com. Feb.5, 2008. Retrieved on 10 May 2008.

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