| China Petroleum and Chemical Corporation | |
| Native Name: | 中国石油化工股份有限公司 |
| Type: | Public |
| Area Served: | Worldwide |
| Foundation: | Beijing, China |
| Location: | Chaoyang District, Beijing, China |
| Industry: | Oil and gas |
| Products: | Fuels, natural gas, lubricants, petrochemicals |
| Parent: | China Petrochemical Corporation |
| Revenue: | (US$482.4 billion) (2022)[1] |
| Operating Income: | (2022) |
| Net Income: | (2022) |
| Assets: | (2017) |
| Num Employees: | 374,791 (2022) |
| S: | 中国石油化工股份有限公司 |
| T: | 中國石油化工股份有限公司 |
| P: | Zhōngguó Shíyóu Huàgōng Gǔfèn Yǒuxiàn Gōngsī |
| Order: | st |
China Petroleum and Chemical Corporation, or Sinopec, is a Chinese oil and gas enterprise based in Beijing. It is listed in Hong Kong and also trades in Shanghai.
Sinopec Limited's parent, Sinopec Group, is the world's largest oil refining, gas and petrochemical conglomerate, headquartered in Chaoyang District, Beijing.[2] 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. It also produces ethanol and several biofuels such as biodiesel and green jet fuel, from waste vegetable oil.[3] [4]
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.[5]
In March 2013, China Petroleum and Chemical Corp agreed to pay $1.5 billion for Sinopec Group's overseas oil and gas-producing assets.[6]
In August 2013, Sinopec acquired a 33% stake in Apache Corporation’s oil and gas business in Egypt for $3.1 billion.[7]
In December 2013, MCC Holding Hong Kong Corp. Ltd. and MCC Oil Gas Limited, acquired an 18% stake of Sinopec in oil and gas business for $9.3 billion.[8]
In 2021, Sinopec began a partnership with NIO, when they unveiled that a NIO Power Swap Station 2.9 would be put into the Sinopec Chaoying Station in Beijing. Additionally, the partnership was to include cooperation between the two companies in new materials, smart EV technology, Battery-as-a-Service (BaaS), construction of recreational facilities, as well as the purchase of vehicles.[9]
Sinopec has developed a megatonnes carbon capture, utilisation and storage (CCUS) project in China. It consists of two parts, the Sinopec Qilu carbon capture and the Shengli Oil Field shifting and storage. The project has been operational since January 2022. The construction of another CCUS project is planned by 2026.[10] [11] [12]
Due to the COVID-19 pandemic, Sinopec reported a loss of 23 billion yuan in the January to June time frame of 2020. In 2021, they reported a 22% increase in revenue as the demand for fuel and oil slowly returned to normal.[13] In 2022, the company reported a 25% net income increase in the first quarter. Diesel output was increased by almost 10% that year and the gasoline production saw only a 0.7% increase.[14]
In April 2023, an agreement was signed between Sinopec and QatarEnergy, making Sinopec the first Asian buyer to participate in the eastern expansion of Qatar's North Field liquefied natural gas project, with a 5% stake in an 8 million tonnes per year LNG train.[15] [16] [17]
Sinopec began production in June 2023 at its first green hydrogen plant in Xinjiang, which has an annual production capacity of 20,000 tonnes of hydrogen.[18] [19] At the end of June 2023, Sinopec Overseas Investment Holding was established as a vehicle for investment, construction and operation of overseas refineries. Overseas investments at the time amount to 400,000 barrels per day at the Yasref refinery, as well as the $10 billion Amur Gas Chemical Complex in East Siberia.[20]
In August 2023, Sinopec, together with Shell and BASF, signed a research agreement with Baoshan Iron & Steel Co. for the construction of China's first open 10 million tonne open carbon capture, utilisation and storage (CCUS) facility.[21] [22]
On 17 October 2023, an equity agreement was signed between Sinopec and KazMunayGas JSC for a 30% stake in a $7.7bn polyethylene project in Kazakhstan, which is expected to start construction in the second half of 2024.[23]
At the sixth annual China International Import Expo (CIIE) on 4 November 2023, Sinopec signed various purchase agreements totalling $40.3 billion, one of those was a 27-year purchase deal with QatarEnergy for LNG.[24] [25]
In November 2023, Sinopec was charged an annual fee of $2 million by the Sri Lankan government due to new fuel distribution regulations.[26] Also in November, Sinopec was approved for the $4.5 billion refinery proposal for Sri Lanka. With the investment, it will be the third company with ties to Sri Lanka and the rights to operate 150 petrol stations.[27] The refinery is to be built in the south of the country, at Hambantota port.[28] [29]
Following the 2022 Russian invasion of Ukraine the company continued doing business in Russia. For this reason Ukraine listed Sinopec as an International Sponsors of War.[30]
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 200km (100miles) 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 100km (100miles) northeast of Port Gentil, according to the Gabonese oil ministry.[31]
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.[32] 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. Sinopec is also looking into other companies such as ERHC Energy which has multiple oil block assets in the Joint Development Zone.[33]
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.[34]
In August 2009, Sinopec completed a takeover of Geneva-based Addax Petroleum for $7.5 billion marking China's biggest foreign takeover. On 31 October 2011 Addax acquired[35] Shell's 80% share of an exploration firm called Pecten that explores and drills in various offshore locations including the oil basin near Douala, Cameroon in cooperation with TotalEnergies.[36]
In June 2013, Sinopec agreed to acquire Marathon Oil Corp's Angolan offshore oil and gas field for $1.52 billion.
In Angola, as of at least 2023, Sinopec is a part minority owner of several offshore projects via Sinopec's half ownership of a joint venture with the private company Sonangol Sinopec International.[37] Sinopec is also a part owner of the joint venture POLY-GCL Petroleum, which as of 2023 is developing a $4 billion natural gas project in Ethiopia, which will include a pipeline to the Djiboutian coast and an export terminal. According to David H. Shinn and academic Joshua Eisenman, the Ethiopian project underscore China's commitment to expanding its import of liquified natural gas from African countries.
Sinopec established its first drilling rig in Saudi Arabia in 2000. In 2004, Sinopec began exploring in Saudi Arabia.
In February 2007, Saudi Aramco and Exxon signed a deal with Sinopec to revamp the Fujian oil refinery and triple its capacity to 240000oilbbl/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.[38] 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.[39] 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.[40]
On 13 April 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 25 June 2010.[41] While largely welcomed by industry, Sinopec's Syncrude stake has raised concerns about the influence the Chinese government may try to exert on Canadian policy makers.[42]
In October 2011, the company offered C$2.2 billion ($2.1 billion) to acquire Canadian oil and gas firm Daylight Energy.[43] Daylight was renamed Sinopec Daylight Energy Ltd. after it was taken over in December 2011.[44]
On 11 November 2011 Sinopec announced that the company will invest $5.2 billion in buying a 30 percent stake in the Brazilian unit of Galp Energia SGPS SA which discovered biggest reserved in the western hemisphere since 1976.[45]
On 17 December 2012 Talisman Energy UK announced Sinopec has invested $1.5 billion in a 49 percent stake of Talisman's North Sea properties.[46]
In April 2013, Sinopec agreed to sell a stake of 30 percent in an oil and gas block in Myanmar to Taiwan's CPC Corp.[47]
In November 2021, U.S. producer Venture Global LNG signed a twenty-year contract with Sinopec to supply liquefied natural gas (LNG).[48] [49] In January 2022 they offered to re-sell LNG to take advantage of high Asian spot prices.[50]
China's imports of U.S. natural gas will more than double.[51] In March 2022, a memorandum of understanding was signed between Sinopec and Aramco to strengthen the already existing ties between the companies and to improve their downstream operations.[52]
Unipec, a subsidiary of Sinopec, is an intermediary for banned Russian oil.[53] [54]
In September 2023, Sinopec used a tender to purchase 30 cargoes of LNG from more than 10 suppliers for additional supply to begin in October 2023. This additional supply helped China during the winter months as well as offset the lacking supply from Venture Global.[55]
Sinopec signed a memorandum of strategic cooperation with BP at the Davos Economic Forum in 2024. The companies will cooperate in both fuel sales, oil and gas trading, marine fuels, oil exploration and production, and low-carbon sector projects.[56]
Sinopec is developing the world's largest green hydrogen project, the Kuga project in Xinjiang. It will reach its full annual capacity of 20,000 tons by the fourth quarter of 2025.[57]
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.[58] 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.[59] 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.[40] Sinopec's activities in Gabon's national parks were suspended in September 2006, by the Gabonese national parks council.[40] 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.[60]
On 21 December 2006, gas started leaking during the drilling of a test well by the Sinopec Southern Prospecting and Development Branch in Quingxi. 12,380 people were evacuated after the leakage occurred. It took at least three attempts and two weeks for the company to seal the leak.[61]
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).[62]
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.[63]
The former head of the companies' board of directors Chen Tonghai was sentenced to death in July 2009 after being accused of corruption. He had been relieved of his post in 2007.[64]
An oil pipeline explosion on Friday, 22 November 2013, in Qingdao, Shandong province killed at least 62 people, injuring 136, and displacing hundreds more after oil previously leaking onto a street during the day ignited.[65]
In November 2021, construction of a green hydrogen plant in Kuqa city began. The cost of the construction is to amount to 3 billion yuan (US$470 million), and the plant will provide an annual production of 20,000 tons which will be supplied to Sinopec's Tahe refinery and production is to begin by June 2023. Also included in the plans are a storage tank as well as a pipeline network.[66] The project will also be powered by a 1000-megawatt solar power station.[67]
In Ordos city, inner Mongolia, 430Mio $ are to be invested in a 400MW windfarm, for the production of 20,000 tons of green hydrogen per year. The first phase of construction started by the end of 2022.[68]