China Petroleum and Chemical Corp. (Sinopec, 00386.HK, 600028.CN) expects to complete its business restructuring to allow private investment by the end of the third quarter, chairman Fu Chengyu said Monday.
Private capital will give the company a new impetus to grow the business, he said.
By the end of the month, Sinopec expects to complete the spin-off of its convenience store business into a limited company and finish an evaluation of its assets by the end of June
“We will then announce details about the entry of private capital,” Fu said.
He said private entities could start investing in the company as early as July until the end of the third quarter.
These are expected to be strategic investors that can complement the company’s strengths in technical support, management and new business.
Financial investors are welcome, as well as non-oil and domestic investors.
Sinopec’s oil and gas distribution business is worth about 300 billion yuan (US$48.4 billion). Private investors are allowed to take up 30 percent.
The money raised from private investors will be used to boost the company’s capital base, pay down debt, boost production of shale gas and improve environmental and safety standards.
The company plans to ramp up its annual production of shale gas to five billion cubic meters by 2015 and 10 billion cubic meters by 2017, Fu said.
He expects China to reach its shale gas production target of 60 billion cubic meters by 2020.
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