China National Offshore Oil Corporation (CNOOC) would reduce its holdings in joint venture refinery CNOOC Dongying Petrochemical Co., Ltd. in a bid to shake off poor refining assts, according to media reports on Thursday.
CNOOC plans to trim its holdings in CNOOC Dongying Petrochemical to 30 percent from 51 percent. Located in Dongying of east China's Shandong province, CNOOC Dongying Petrochemical was set up jointly by CNOOC Oil and Petrochemical Co., Ltd. and Shandong Zhonghai Chemical Group in 2008.
The refinery has a 1.5-million-tonne/year distillation unit, an 800,000-tonne/year delayed coking unit, a 400,000-tonne/year hydrogenation unit and others. Moreover, CNOOC mulls on merging of its refining and sales operations and detailed reform plan is expected to come out by the end of 2015, said a source with CNOOC Oil and Petrochemical Co.
Integrated operation of refining and sales arms would eliminate conflicts of interests and disagreement on settlement and stay closer to the market, according to the source.
The refining capacity of Shandong Haihua Group Co., Ltd., controlled by CNOOC Oil and Petrochemical Co., would be expanded to 4 million tonnes per year from 1 million tonnes per year. CNOOC is in the process of restructuring its refining operations amid overcapacity and low oil prices.