Sinopec

Domestic

In 1994, Sinopec was among the large industrial state-owned enterprises of China which were selected for a pilot program of restructuring as state holding companies, thereby enabling partial public listings of its subsidiaries' assets.[5]

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. The IPO raised $3.5 billion. A Shanghai listing was completed in June 2001. Prior to its operation as a company Sinopec's assets came from the Ministry of Petroleum Industry and the Ministry of Chemical Industry which partially privatized in the 1980s.[6] Given its legacy asset base from Sinopec Group, analysts have categorized it as a more downstream oil player than PetroChina.[7][6] However, since 1998 Sinopec has expanded into upstream endeavors.[6] This expansion began with a state mandated asset swap with China National Petroleum Corporation (CNPC) which gave some of Sinopec's refineries to CNPC in return for Sinopec acquiring some of CNPC's upstream assets.[8][9]

China entered the WTO in 2001 which some experts claim put additional pressure on their domestic oil industry to be efficient.[9][10] In the lead up to going public, Sinopec cut over 200,000 jobs from its roster.[11]

BP partnered with Sinopec, in 2005, to build SECCO an ethylene derivatives plant with an initial investment of $2.7 billion.[12] It is located in the Shanghai Chemical Industry Park, and generates over 3.2 million tons of petrochemical products annually.[13][14] In 2017, Sinopec bought out the remainder of BP's stake in SECCO through its Gaoqiao subsidiary for $1.68 billion.[13][15] Gaoqiao's operations predate the creation of Sinopec and it operates 75 plants for producing finished petroleum products such as fuels, oils, organic compounds.[16][14] Ineos bought out half of Sinopec's share of SECCO in 2022 as part of a broader partnership deal.[12]

Sinopec operates the Jiujang Petrochemical Complex which was originally constructed in 1975 and has received a series of improvements over time.[17][18][19] The refinery processes 8 million tonnes of crude oil per year.[19] Xi Jinping visited the refinery, in 2023, when the company highlighted the importance of Socialism with Chinese characteristics and presented awards.[20]

Sinopec posted a 6.8% operating margin for the 2006 financial year. Profit was limited in part by government price controls on downstream petrochemical products. The National Development and Reform Commission sets gasoline and diesel prices and the Ministry of Finance collects windfall tax on upstream profits.[8] At the beginning of 2006, Chinese retail gasoline and diesel sales were not profitable for Sinopec and sales were hurting the company's financials. To pressure the NDRC, Sinopec and CNPC cut production causing long lines at the pump. This led to NDRC approving a 15% increase in the price at the pump. To offset losses from the price controls, the state gave Sinopec $1.1 billion in subsidy during 2005 and $647 million in 2006.[8] This finance example demonstrates of Sinopec's implementation of policy adjusted profit.[20] Chinese methods on how to articulate, quantify, and report the sometimes conflicting interests of profit and political policy have evolved during over time. Some commentators on the Shanghai Stock Market, where Sinopec trades, call these methods "valuation with Chinese characteristics".[21] Sinopec demonstrated the "one profit, five rates" method in 2023.[21][20] This method calls for assessing the company's performance with profit, "asset-liability ratio, return on equity, operating cash ratio, overall labor productivity, and R&D investment intensity".[21]

In February 2007, Saudi Aramco and Exxon signed a deal with Sinopec to revamp the Fujian oil refinery and triple its capacity to 240000 oilbbl/d by 2009. The Saudi Aramco investment is strategically aligned because Saudi Aramco produces a heavier crude oil which is not preferable for other Chinese refining facilities.[22] 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.[23] Their subsidiaries also expanded cooperation in Tianjin the following year.[24] They invested over $3 billion from 2008 to 2019 expanding the ethylene production capacity multiple times and finally achieving 1.3 million tons per year of production.[25][26][27] In Fujian, Sinopec also operates the Gulei Industrial Park. It began as a joint venture with a group of Taiwanese companies operating as Dynamic Ever Investments in 2015. The venture took $4 billion of investment and has a production capacity of 1 million tonnes of ethylene per year.[28][29][30][31] At the time of its approval it was the only Taiwanese petrochemical joint venture in mainland China.[32] It was approved by the Fujian branch of the NDRC which owns a 25% stake in the project. The plant began producing downstream chemicals in 2018 and became fully online in 2021.[31][29] Phase two began, in 2024, when Saudi Aramco made an additional $9.8 billion investment in the facilities. These expansions are scheduled to be fully operational in 2030.[33]

Sinopec completed construction of a new ethylene plant in Wuhan at the end of 2012. The construction of this plant was done as a joint venture with the South Korean SK Group. This facility was planned in alignment with the National Development and Reform Commission's goal of producing more ethylene domestically in order to rely less heavily on foreign imports. It will provide 800,000 tons/year which is a significant step towards the NDRC's 2015 goal of raising domestic production by 7.5 millions tons/year.[34][35] In March 2013, Sinopec agreed to pay $1.5 billion for its parent company's overseas oil and gas-producing assets.

Zhejiang Oil Products Company was originally founded in 1950, but began operating under Sinopec in 1998. It is Sinopec's highest selling oil refinery and one of the most important companies in Zhejiang.[36] Sinopec has continuously improved the refining capacity and it ranks as one of the largest refineries in the world.[37][38] The refinery prioritizes output of non-fuel chemicals at a notably higher rate than comparable refineries. This large scale production, particularly of aromatic compounds hurt foreign competitors.[38] This attracted further investment in China from Saudi Aramco which acquired a 10% stake in Zhejiang Oil Products Company in 2023.[39][40]

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.[41] 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.[42]

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.[43]

China's imports of U.S. natural gas will more than double.[44] 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.[45]

The Hainan Baling Chemical New Material Company, a Sinopec subsidiary in Hainan, opened a one million tonne per year Styrene-butadiene (SBC) plant in 2023. This new facility made Sinopec the largest producer of SBC in the world at the time.[46] Sinopec began operating the deepest oil well in Asia in 2023. As part of Project Deep Earth the drill went 9432m below Xinjiang.[47] Sinopec and BP have worked together since Sinopec formed.[48][15] Their joint venture in Zhejiang had 2024 gas stations in 2021.[49] They signed a memorandum of strategic cooperation with BP at the Davos Economic Forum in 2024. Sinopec has set a goal of building 5000 new EV charging stations by 2025 and plans to cooperate with BP on achieving that goal.[50][51] These and other of Sinopec's environmental goals are aligned with the Fourteenth five-year plan.[20]

International

Sinopec has demonstrated a willingness, characteristic Chinese national oil companies, to invest in foreign, often risky, infrastructure. These firms work in concert with the Chinese state owned financial sector via direct low cost financing and indirect infrastructure agreements between foreign nations and Chinese banks.[52][53][6] Several experts claim that the role of direct financing support is not as important as indirect support.[8][6][54] Large foreign purchases are particularly notable in the Chinese context because they require approval by the National Development and Reform Commission and the State Council.[55] Sinopec made failed attempts to acquire Iranian oil reserves in 2001 and Kazakh reserves in 2003.[56] In subsequent years, Sinopec relied more heavily on off-taker agreements to gain access to foreign markets.[56] The 2008 financial crisis made a large impact on Chinese foreign policy and Chinese oil companies put a higher priority on mergers and acquisitions in the following years.[6]

According to the OECD, foreign oil ventures are an attractive investment for Chinese national oil companies because China is a large importer of oil and wants to control its supply chain. Some Chinese observes agree with this assessment and highlight Sinopec's 2005 goal of importing 15 million tons of crude oil for refinement in China. China's Go Out policy explicitly stated, in 2001, that Sinopec should "make effective use of overseas resources, build the overseas oil and gas supply bases and diversify the oil imports". This was revised in 2006 to "broaden international oil and gas cooperation".[57] According to the company, in 2022, foreign operations were staffed 74% by local workers rather than Chinese employees.[58]

Sinopec began its partnership with Iran in 2001, and signed a 30 year deal to invest $70 billion in the development of Yadavaran Field in 2004.[57][56][59][60] Contract negotiation for this program took three years such that technical work and funding did not actually begin until 2007.[60][61] The US pressured China to block the investment due to sanctions, but Iran claims that pressure did not delay the deal.[56][60] Iran expressed pleasure with the deal and stated the goal of replacing Japan with China as the primary exporter of Iranian oil.[56] There is little agreement about the exact amount of oil and gas available through the Yadavaran project, but all claim that it is a large oil field by global standards.[59][60][61] The first phase of drilling was completed in 2012 and production continued to expand.[61] Sinopec claims to have ceased buying this oil due to US sanctions in 2019.[62][63]

Amid rising global oil prices linked to the U.S.- Israel conflict with Iran, on 23 March 2026, Sinopec announced an increase in gasoline prices to 2,205 yuan per metric ton, effective 24 March. The National Development and Reform Commission subsequently limited the increase to 1,160 yuan per metric ton.[64]

Sinopec established its first drilling rig in Saudi Arabia in 2000. In 2004, Sinopec began exploring in Saudi Arabia.[56]

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.[65] During his African visit, in 2004, 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 200 km 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 100 km northeast of Port Gentil, according to the Gabonese oil ministry.[66] In 2013 and 2014 Sinopec and the Gabonese government had significant disputes over licensing and fees. The Gabonese government nationalized one of the oilfields that Sinopec was previously licensed to extract from.[67][68] Ultimately negotiations between the parties resulted in new leases for Sinopec's further extraction.[69]

In 2004, the Export–Import Bank of China signed a $2 billion loan with Angola to finance infrastructure projects by Chinese companies. This led to the Angolan government blocking a deal between Shell and India's Oil and Natural Gas Corporation in favor of a deal with Sinopec.[54][70]

In 2005, Sinopec and CNPC jointly purchased EnCana an Ecuadorian Petrochemical company for $1.42 billion. The purchase gave the joint venture, called Andes Petroleum Company, access to over 62,000 barrels per day of crude and the OCP pipeline which can pump 450,000 barrels per day.[71][72] It was the largest petrochemical deal in Ecuadorian history.[72] Beginning in 2012, Chinese banks began large financing agreements with Ecuador to pre-pay for oil procured via Andes Petroleum.[73][74] Ecuador conducted major oil industry reforms in 2007 and 2010 which promoted many international oil companies to exit the Ecuadorian market. Sinopec, on the other hand, remained. As part of these reforms, Ecuador required that local labor be used for over 90% of unskilled and administrative positions. This put an end to further disputes about local job creation. International observers note that Andes Petroleum's operations were among the most successful in Ecuador through 2014. This success prompted an expansion of its operations. The company has generally had better relations with the local population than EnCana did.[73] Most of the planned expansions were halted in 2019 when opposition from environmental activists and small indigenous tribes prompted Ecuadorian courts to find that the tribes had not been properly consulted.[75][76]

Sinopec is a partner in Petrodar Operating Company Ltd., a consortium whose partners also include China National Petroleum Corporation and Sudapet (the Sudanese state-owned oil company), among others.[77] In 2005, Petrodar commenced production of oil in blocks 3 and 7 in South-east Sudan and transported them via its new pipeline. Petrodar's operations represent a major increase in overall Sudanese oil production.[78] Sinopec is also looking into other companies such as ERHC Energy which has multiple oil block assets in the Joint Development Zone. When South Sudan seceded it took most of Sudan's oil reserves with it.[79][80] The Petrodas pipeline is used to transport South Sudan's oil for export in Sudan.[80] In 2024, fighting in the vicinity of Singa, Sudan halted the flow.[81][80][82]

In 2006, Sinopec began operations in Russia with a Rosneft partnership.[83] The companies invested in Sakhalin-III and oil was first drilled in 2006.[84][85] Rosneft expanded its cooperation with Sinopec in a joint venture called Udmurtneft.[86] They acquired access to 551 million barrels of proven reserves and facilities capable of producing 120,000 barrels per day. The entirety of the deal was financed by Sinopec, but the total price was not disclosed. The sellers claimed offers were $4 billion.[83]

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.[87][88] 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 Somali insurgents on the premises of the oil company Sinopec in Ethiopia.[87][8]

In 2008, Sinopec bought Tanganyika Oil for $2 billion giving Sinopec access to its Syrian oil fields.[89][90] These fields were reported to have over a billion barrels of crude reserves and a trillion cubic feet of natural gas reserve. However, the Syrian investments became significantly less valuable in 2012 when the Syrian civil war began.[91] The turmoil forced Sinopec to stop regular operations in Syria.[92] The company negotiated with several parties in Syria on multiple occasions in an attempt to restart operations.[91]

Sinopec also began investing in Australia in 2008 with its $594 million purchase of a 60% stake in AED Oil. AED was heavily indebted at the time of the purchase in part due to the Puffin oil fields producing less than expected. Sinopec took over operation of these fields after the sale.[93][94]

In 2009, Sinopec acquired Addax Petroleum Corp for $7.24 billion. This was the largest foreign purchase by a Chinese company. Addax was producing an average of 136,500 barrels per day. Addax was based in Geneva at the time, but the Geneva office was closed in 2017 after Sinopec agreed to pay $31.8 million to settle a Swiss bribery investigation of their operations in Nigeria.[52][95] Sinopec claimed the office closure was due to low oil prices.[96] The alleged bribes stemmed from a tax dispute between Sinopec Addax and the Nigerian government. Both sides claimed they had not received their fair share of benefits. The dispute was settled in 2015.[97] Addax's resources were concentrated in West Africa and Kurdistan.[52][70] Sinopec's assumption of the agreements with the Kurds created difficulty in forming new agreements with the Iraqi government because Iraq has a long standing policy against dealing with anyone who makes agreements with the Kurds. However these issues did not spread to other Chinese energy companies.[98][99]

On 13 April 2010 the company announced acquisition of Conoco Phillips's 9% stake in the Canadian oil sand firms, Syncrude, for $4.65bn.[100][101] 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.[102] The following year, Sinopec took over Daylight Energy for C$2.2 billion ($2.1 billion). Daylight was then renamed Sinopec Daylight Energy Ltd..[103][104] The OECD and Chinese observers note Sinopec's attraction to the Syncrude deal is partly explained by a desire to acquire technical knowledge on oil sands extraction which can be used to boost domestic oil production.[101][57]

Sinopec invested $7.1 billion in Repsol Brazil to begin a new partnership in 2010.[105][106][101] Chinese observers note that part of Sinopec's motivation for the deal was to bring deep water drilling expertise to China.[57] In 2011, Sinopec additionally invested $5.2 billion for a 30 percent stake in the Brazilian unit of Galp Energia SGPS SA which owns the rights to biggest discovered oil reserve in the western hemisphere since 1976. This brought the total investment of Chinese energy companies in foreign oil assets for the year to $16 billion.[107]

Sinopec partnered with Chevron Corporation on a deep water drilling operation in Indonesia in 2011. The project is located in the Kutai Basin and has access to 15 million barrels of crude oil reserve and 700 billion cubic feet of natural gas. The deal closed with Sinopec getting an 18% stake for $680 million.[108] This project aligned with China's goal of doubling gas' share of energy production during the 2009-2015 period.[101][109]

Unipec first became involved in Ghana in December 2011 when Ghana National Petroleum Corporation agreed to supply 13,000 barrels of oil per day for the following 15 years in return for the Master Facility Agreement. The MFA was a $3 billion six year loan from CDB which Ghanaian President Mills and Hu-Jintao directly negotiated on.[6][70] The MFA also required Ghana to spend most of the funds on projects constructed by Chinese contractors. Unipec was awarded the first $750 million of these funds to build the Atuabo Gas Plant. In 2013, Unipec halted work on the project to pressure Ghana into making amendments to the MFA that CDB had requested. By 2014, Ghana had only received $600 million of the promised MFA funds.[6]

On 31 October 2011 Sinopec Addax acquired[110] Shell Oil Company'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.[111]

BP and Sinopec was expanded on an existing base of joint ventures via new bunker fuel projects in 2015.[112] Bunker fuel was then delivered to ports in Singapore, China, and Europe in 2020.[113] Sinopec Addax made a $1.5 billion investment in North Sea drilling operations in 2012.[114][106] The investment was rebranded multiple times. Originally, the deal was with Talisman Energy and Sinopec exited this investment after a dispute with Repsol was settled for $2.1 billion. The dispute began in 2015 over amounts paid by Sinopec and was settled in 2023.[115] In 2013, company sold a 30 percent stake of an oil and gas block in Myanmar to Taiwan's CPC Corp.[116] This was followed by Sinopec's acquisition of a 33% stake in Apache Corporation's oil and gas business in Egypt for $3.1 billion.[117]

In June 2013, Sinopec agreed to acquire Marathon Oil Corp's Angolan offshore oil and gas field for $1.52 billion.[118] 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.[119] 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.[119] 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.[119] In November 2021, U.S. producer Venture Global LNG signed a twenty-year contract with Sinopec to supply liquefied natural gas (LNG).[120][121]

In January 2022 they offered to re-sell LNG to take advantage of high Asian spot prices.[122] 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.[123] Unipec, a subsidiary of Sinopec, is an intermediary for banned Russian oil.[124][125] In March 2025, Sinopec reportedly halted purchases of Russian oil due to international sanctions.[126] 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.[127][128][129] The contract has a 27-year term making it the longest ever purchase agreement for LNG.[130] 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.[131] 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.[132] 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.[133] In 2023, Sinopec was approved to invest $4.5 billion in refinery construction at Hambantota International Port, Sri Lanka.[134][135][136]