Weifang Hongrun Petrochemical Auxiliary Co Ltd, China's third largest independent refinery by capacity, was negotiating with a state-run oil giant headquartered in Beijing on acquisition, a source close to the issue told C1 Tuesday.
The potential buyer was one of the top four oil companies in China, according to a fuel oil importer based in Shandong. "It was still uncertain whether it would fully control the 74kb/d independent refinery in Shandong or not, because the two parties just showed intent for cooperation," said the importer. PetroChina might withdraw its stakes in the refinery ahead of the deal, the importer guessed.
A senior with Weifang Hongrun declined to reveal details, just noting result would be released in two months if there were any changes in shares of the refinery.
A senior with the potential buyer confirmed the company was in talks with Weifang Hongrun, but refused to give more details.
If everything went smoothly, the potential buyer would become the third state-owned oil giant acquiring independent refineries in Shandong, after ChemChina and CNOOC, market sources denoted.
It seems natural in recent years that independent refineries seeking opportunities to co-operate with state-owned oil majors in face of aggravating surviving conditions, the sources pointed out. The refineries have been suffering from feedstock shortage and negative refining margins, which were also forced to reduce emissions.
Oil refining capacities of independent refineries in China are expanding by 10-mil mt per year on average in recent five years, C1's record showed. By the middle of 2010, the independent refineries have a combined nearly 100-mil mt per year of refining capacity, however, most of them ran only at 20-30% most of time.
Weifang Hongrun, located in Weifang City of Shandong Province, is equipped with a 3.7-mil-mt/yr crude distillate unit and secondary units including fluid catalytic cracker, delayed coker, hydrogenation unit and bitumen unit, etc.
The potential buyer was one of the top four oil companies in China, according to a fuel oil importer based in Shandong. "It was still uncertain whether it would fully control the 74kb/d independent refinery in Shandong or not, because the two parties just showed intent for cooperation," said the importer. PetroChina might withdraw its stakes in the refinery ahead of the deal, the importer guessed.
A senior with Weifang Hongrun declined to reveal details, just noting result would be released in two months if there were any changes in shares of the refinery.
A senior with the potential buyer confirmed the company was in talks with Weifang Hongrun, but refused to give more details.
If everything went smoothly, the potential buyer would become the third state-owned oil giant acquiring independent refineries in Shandong, after ChemChina and CNOOC, market sources denoted.
It seems natural in recent years that independent refineries seeking opportunities to co-operate with state-owned oil majors in face of aggravating surviving conditions, the sources pointed out. The refineries have been suffering from feedstock shortage and negative refining margins, which were also forced to reduce emissions.
Oil refining capacities of independent refineries in China are expanding by 10-mil mt per year on average in recent five years, C1's record showed. By the middle of 2010, the independent refineries have a combined nearly 100-mil mt per year of refining capacity, however, most of them ran only at 20-30% most of time.
Weifang Hongrun, located in Weifang City of Shandong Province, is equipped with a 3.7-mil-mt/yr crude distillate unit and secondary units including fluid catalytic cracker, delayed coker, hydrogenation unit and bitumen unit, etc.
