By YVONNE LEE
HONG KONG -- State-owned China Petrochemical Corp., also known as Sinopec Group, has set up a new oilfield service company in Beijing as it seeks to tap the rise in Chinese and overseas exploration and production activities.
Exploration and production companies hire oilfield service providers to perform specialized tasks required to extract oil and gas from the ground.
China, the world's largest energy consumer, is increasingly demanding more such services to extract resources from domestic and overseas projects.
The new company, Sinopec Oilfield Service Corp., is providing oilfield services not only in China, but also in international markets such as North America, Middle East, Africa, Central Asia and South East Asia. This will help its parent gain a further foothold in the oilfield services market, strengthening its competitive edge in China as well as overseas.
At present, China's oilfield services market is dominated by the three largest oil giants including Sinopec, China National Petroleum Corp. and China National Offshore Oil Corp., which account for over 80% of the market share, with the remaining divided between 1,200 domestic oilfield services providers including Anton Oilfield Services Group.
Sinopec Oilfield Service Corp. was set up in Beijing with total fixed assets of 76.6 billion yuan (US$12.2 billion) through the restructuring of Sinopec Group's oilfield engineering firms, Sinopec Group said in a statement.
The new unit is estimated to receive CNY95 billion of revenue this year. It has already chalked up 480 contracts in 43 countries worth US$14.2 billion.
Sinopec Group has been ramping up efforts to expand overseas ever since Chairman Fu Chengyu joined the refining giant last year after leaving Cnooc Ltd., a company with a history of making aggressive moves outside China.
Dow Jones Newswires