Sinopec is another name for the China Petroleum and Chemical Corporation. As Asia’s biggest refiner, its main businesses include oil and gas exploration, refining and production of petrochemicals, fertilizers and a range of other chemical products. It has had business interests in Africa for many years. It is now planning to increase its stake in major oil companies and various gas projects to ensure long-term supplies as well as guard against a rebound in oil prices. This was announced by the Chairman of the company in Hong Kong on the 30^th. Sinopec would seriously look at projects in politically stable countries having high quality oil and gas reserves, he said.

The move is the outcome of the declining oil reserves of the company last year, which are affecting its financial performance. The 6.1 % decline warranted immediate action and large investments to ensure replenishment of stocks. The company has also seen a 47% decline in net profits, due to spiraling costs, a highly volatile oil market with fluctuating oil prices, and efforts made by the government to fix prices at lower levels to resist inflationary pressures, which could trigger off another set of economic problems. Its performance has been better than expected due to the company’s attempts to reduce input costs, which in turn, bolstered margins.

Hence, Sinopec has adopted a “go global” strategy for accomplishing “upstream acquisitions”. Earlier Sinopec’s overseas activities were over seen by its parent company, the Sinopec Group. Sinopec will soon begin purchasing assets from its parent company, but no details on this are available yet.

Sinopec has been involved in the construction of the 1500 km pipeline to the seaport of the Red Sea. It holds equity in oil fields in Sudan, has production rights in Angola, is producing oil in the Gabon oil fields and in Algeria, Sinopec is developing the Zarzaitine onshore oilfield. It is also developing and producing the Congo-Brazzaville oil fields. In Ethiopia recently, one of its oil projects was attacked and many workers killed, but that has not prompted the company to withdraw, and remains committed to its production targets despite all odds.

Source : China Africa