Sinopec

Jul 12, 2017

About Sinopec Group

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group, established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group is a state-owned company solely invested by the state, functioning as a state-authorized investment organization in which the state holds the controlling share. Headquartered in Beijing, Sinopec Group has a registered capital of RMB 231.6 billion. The board chairman of Sinopec Group is its legal representative.

Sinopec Group executes the investor rights over related state assets owned by its full subsidiaries, controlled companies and share-holding companies. These rights include receiving returns on assets, making major decisions and appointing management teams. The Group operates, manages and supervises state assets according to related laws, and shoulders the corresponding responsibility of maintaining and increasing the value of state assets. China Petroleum and Chemical Company (Sinopec Corp.), controlled by Sinopec Group, issued H-shares and A-shares at overseas and home respectively in October 2000 and August 2001 and was listed on stock markets in Hong Kong, New York, London and Shanghai.

Sinopec Group’s key business activities include: industrial investment and investment management; the exploration, production, storage and transportation (including pipeline transportation), marketing and comprehensive utilization of oil and natural gas; the production, marketing, storage and transportation of coal; oil refining; the storage, transportation ,wholesale and retail of oil products; the production, marketing, storage, transportation of petrochemicals, natural gas chemicals, coal chemicals and other chemical products; the exploration, design, consulting, construction and installation of petroleum and petrochemical engineering projects; the overhaul and maintenance of petroleum and petrochemical equipments; the research and development, manufacturing and marketing of electrical and mechanical equipments; the production and marketing of electricity, steam, water and industrial gas; the research, development, application and consulting services of technology, e-business, information and alternative energy products; the import and export of self-support and agent commodity and technology; foreign project contracting, invite bidding, labor export; the international storage and logistics business.

Sinopec Group ranked the 3rd in the Fortune Global 500 in 2014

Awards

In 2009, Sinopec won the following awards on corporate governance, investor relations and sustainable development.

Most Admired Company 2009 in petroleum and petrochemical industry, Fortune Magazine, China Edition.

Sinopec Group and President Su Shulin were respectively awarded Outstanding Enterprise in Fulfilling Corporate Responsibilities and Outstanding Individual in Fulfilling Corporate Responsibilities, Xinhuanet.

Two public welfare initiatives won the award of 2009 Best Social Practices by SOEs, organized by State-owned Assets Supervision and Administration Commission of the State Council (SASAC). One initiative was to facilitate the development of agriculture, farmers and rural area, ensure the completion of three summer agricultural tasks (summer harvesting, planting and managing), and contribute to the growth of agricultural output. The other was sponsoring China Lifeline Express Fund’s project to provide free treatment to cataract patients in disadvantaged areas.

Eleven projects were granted National Science and Technology Progress Award. Project of development and industrial application of naphtha catalytic reforming technology won first-class prize of the Award.

First place for team performance in 2009 Competition of Digit-controlled Lathe Skill among SOE technicians and third place for team performance in the Ninth Welding Skill Competition among engineering business entities across the nation.

One of 60 Most Influential Brands of China, People’s net and China Economic Weekly.

Sole winner of 2009 Special Award for Light-Restoring Merit, China Lifeline Express Fund.

2009 Children Charity Award, All-China Women’s Federation.

Ranking first and graded Level-A in SASAC’s annual assessment of IT application level of SOEs under direct leadership of central government.

Sinopec Group website was graded Level-A in SASAC’s website assessment of SOEs under direct leadership of central government.

BUSINESS

Overseas Oil & Gas E&P

International trade

In 2011, in pursuit of the goal of building world-class energy trading position, we continued to expand global trade and steadily boost our performance. Trade volume of crude oil reached a record high of over 200 million tonnes. New breakthrough was made in LNG trade. Total revenue of petroleum trade in 2011 was USD 170.8 billion, exceeding 1 trillion yuan, for the first time, among which USD 75 billion was from external trade. While ensuring supply security, we carried out strategic procurement with close cooperation with more than 700 companies worldwide and significantly lowered cost and increased profit. Our trading network grew more extensive, and we made rapid progress in building storage facilities, providing greater flexibility to our trading activities.

We actively expanded the export market for our oil products, chemicals, equipment and materials, and signed a long-term export supply agreement with the world’s largest carbon company, US-based RAIN CII, thus breakthrough in calcined petroleum coke export. We vigorously provided equipment and materials procurement services for overseas projects, so as to extend markets for internal manufacturing subsidiaries. We exported USD 200 million worth of equipment and materials.

For imports, on the one hand, we strengthened specialized procurement and teamed up with global leading suppliers. On the other hand, we extended supply chain management, increasing our influence to the suppliers, and incorporated strategic suppliers’ raw materials and core components into centralized procurement, further enhancing control in schedule, quality, cost, etc. As a result, we ensured timely and economical supply of equipment, materials, technologies to the company’s operations and major projects.

For exports, we made every effort to extend overseas markets for catalysts, lube oil, petroleum coke, paraffin wax and asphalt,
and cooperate with the company’s catalysts, lubricants and special products subsidiaries, combining their technology strength with the company’s international marketing network, further consolidating our competitiveness. Our 2011 export in these products totaled USD 1.41 billion, up by 64%.

Overseas Oil & Gas E&P

We seized the opportunities to develop new projects. We signed 9 new projects in 2010, and closed the deal for 9.03 equity transfer of Syncrude project in Canada. Overseas oil and gas resources expanded rapidly. In 2010, overseas equity crude production reached 18.4 million tons, up by 43.9 y-o-y (year over year).

Overseas Petroleum Services

We aimed to expand overseas market, providing high-end and comprehensive services to grow stronger. We have maintained stable market share in the Middle East, Africa, Latin America and Central Asia. By end 2010, 448 service contracts were executed in 35 countries valued USD9.48 billion. Newly-signed contract value in 2010 hit USD2.84 billion, contract completed valued at USD2.64 billion. Today, we have 382 service teams and 18,764 people working overseas.

Overseas Refining and Chemical Engineering Services

In 2010, we worked on 11 refining and chemical engineering projects in Saudi Arabia, Kazakhstan, etc. with contract value totaled USD5.5 billion. 7 projects including Yanbu HDPE and Kayan EO/EG in Saudi were completed, valuing at USD510 million. 17 new overseas projects were awarded to Sinopec with total contract value of USD2.31 billion. By end 2010, there were 9065 managers and operators executing refining and chemical engineering projects overseas.

Petroleum Engineering

China Petrochemical Corporation (Sinopec Group) has an integrated petroleum engineering system which is comprised of geophysical prospecting, drilling, well logging, mud logging, downhole operation, oilfield facility construction and machinery manufacturing, with more than 2,400 crews who are specialized in geophysical prospecting, drilling, well logging, mud logging, and downhole operation, etc. In 2011, the number of employees was about 135,000, with total assets of 62 billion yuan. The annual income was more than 88 billion yuan.

By the reform and adjustment during the “Tenth Five-year Plan”, and the continuous development during the “Eleventh Five-year Plan”, the petroleum engineering industrial chain covering oilfield exploration and development has been gradually becoming clear and integrated. The petroleum engineering industrial clusters has been basically formed.
The equipment and its operation capability have been significantly improved. The technical series have been formed and the technology level keeps rising. The income scale has significantly increased. Overseas markets have expanded greatly and economic efficiency improved considerably. While guaranteeing the execution of Sinopec resources strategy, it continues to strengthen the basis of self development, and has laid a good foundation for petroleum engineering to realize professional, market-oriented and international development.

In recent years, the petroleum engineering system of Sinopec Group has made significant achievements on petroleum engineering technology, which made important contributions to Sinopec resources strategy implementation and international market development.

Firstly, the development of the seismic technology in mountains, desert, gobi and loess plateau regions has obtained significant results. It has promoted the discovering of big gas fields in northeast Sichuan and northern Erdos Basin, enlarged the reserve scale of Tahe Oilfield. Sinopec has achieved stable oil and gas production in the eastern matured oilfields through the application of high accuracy seismic technique.

Secondly, Sinopec has improved an integrated drilling and completion technologies in horizontal wells and special wells characterized by large drainage area, high single well production and recovery ratio. Sinopec has developed the drilling and completion technologies which focus on discovery and protection of reservoir, and promoted the exploration and development of low pressure, low permeability and low production rate oilfields.

Thirdly, Sinopec has developed safe and high quality drilling and completion techniques in deep wells and ultra-deep wells, which considerably improved the drilling speed in Northwest China, Sichuan and North China, supported the safe operation of Puguang Gas Field.

Fourthly, Sinopec has improved the well logging and mud logging technologies in complex reservoir and special drilling procedure.

Fifthly, the application of large scale fracturing equipments upgraded the ability of reservoir stimulation, and preliminarily solved the technical problems in deep and high fracturing pressure reservoir. Considerable progress has been made in separate layer fracturing stimulation technology in horizontal wells which are basically adapted to various types of completion. These technologies have improved the development of the low permeability reservoir, and laid a technology foundation for exploration and development of the shale oil or gas reservoir.

Sixthly, new progress has been made in offshore petroleum engineering technologies. Design, drilling and completion techniques of large scale cluster wells for marine oil recovery on land have been gradually improved. Jack-up rig “Kan Tan 6”, Jack-up rig “Hai Yang 1”, Jack-up rig “Sheng Li 10”, and PSV “Kan Tan 311” were delivered and put into operation successfully. Pipe-laying crane vessel “Shengli 902” was constructed by Shengli Oilfield, with an operating water depth up to 100 meters. In Shengli shallow water Lao 168 block, 58 wells were drilled from one drilling platform, which effectively solved the problems on anti-collision in high dense cluster wells, borehole stability of long open hole section and safety disposal and recycling of waste drilling fluid.

Seventhly, the techniques of large diameter pipeline crossing rivers, pipeline construction on the mountain slope, cold bending process of large diameter and thick wall pipe, welding technique of X70 high strength steel, have guaranteed the execution of the Sichuan to East Gas Pipeline Project.

Eighthly, the capabilities of research and manufacturing of petroleum drilling and production equipment continuously grew. Sinopec has developed series of easy mobilization and installation drilling rigs with drilling depth from 3000 meters to 7000 meters and XJ1200 mountainous oilfield workover rig. These equipments with a lot of patents were awarded “national important new products”. Electric drilling/workover rigs driven by industrial grid have been developed, which realized energy-saving and environmental protection. Cementing equipment with liquid level and density automatic control system, model 2500 fracturing package, has reached international advanced level. SL-6000 high-precision imaging logging surface system and its downhole instrument series continue to improve. Stage breakthroughs have been made on research and development of LWD tool, EMWD instrument, exploration and NLS comprehensive logging instrument. At the same time, a number of characteristic technologies and core technologies have been formed which have intellectual property rights. Sinopec petroleum engineering system obtained 217 patents about equipment, apparatus and tools during the “Eleventh Five-year Plan”.

Chemicals Marketing

SCS is the largest chemicals trading company with an annual sale volume of more than 43 million tons. Products available for domestic and international markets mainly include synthetic resin, synthetic rubber, synthetic fiber monomers and polymers, synthetic fiber and organic chemical feedstocks.

Headquartered in Beijing, SCS consists of four regional branches located respectively in Beijing, Shanghai, Guangzhou and Wuhan. These branches are entrusted by SCS to be respectively responsible in four regions — North China, East China, South China and Central China. The representative offices of the branches are set up in major target markets of China and new transit warehouses are established in major consumer areas for customer-focused services.

SCS also established Jiangsu Branch for chemical product warehousing and retail. As a wholly-owned subsidiary of SCS based in Hong Kong, Sinopec International (Hong Kong) Co.,Ltd. mainly imports and exports chemical products and procures chemical feedstock for Sinopec subsidiaries.

With the management philosophy of Integrity, Discipline, Cooperation and Win-win, SCS is committed to Customer-centered services and market-oriented operation. In cooperation with Sinopec’s production subsidiaries and R&D institutes, SCS provides high-quality products and services by persistently perfecting its marketing network and improving its brand image to create value for its customers. Growing together with our clients, SCS will achieve sustainable, effective and harmonious growth with strong resistance against industry cyclical risks; and whishes to become a petrochemicals supplier with strong global competitiveness.

 

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