Caixin
Jan 18, 2020 05:44 AM
BUSINESS & TECH

China Names New Leaders for Two State Oil Giants

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China’s two largest state-owned oil behemoths welcomed new top leaders on the same day amid an unfolding revamp of the energy sector.

Dai Houliang, chairman of China Petrochemical Group (Sinopec), will become the new chairman of archrival China National Petroleum Corp. (CNPC), replacing the retiring Wang Yilin, CNPC said Friday.

Succeeding Dai as Sinopec chairman will be Zhang Yuzhuo, who once served as the chairman of China's largest coal miner, Shenhua Group, Sinopec said.

Dai, 56, is a refining specialist who worked at Sinopec since 1985. He served in senior executive posts at Sinopec’s Hong Kong-listed arm since 2005 and was appointed group chairman in July 2018.

Zhang, 58, is a coal industry expert. He worked at Shenhua between 2002 and 2017, when he was named to head the Binhai New District in the port city of Tianjin.

The appointments come as China steps up restructuring of the state-controlled energy sector to increase domestic production and open the industry to more competition. Earlier this month, the government said it would grant private and foreign companies access to explore for and produce oil and gas in the country starting May 1, ending state giants’ exclusive control.

The new leaders will also face challenges leading the companies through a major reorganization of their pipeline businesses following the creation of a new national oil and gas pipeline operator. China unveiled China Oil & Gas Piping Network Corp. in December to consolidate the pipeline assets of CNPC, Sinopec and China National Offshore Oil Corp. (CNOOC).

CNPC owns nearly 80% of China’s 80,000 kilometers (49,709 miles) of natural gas pipelines, and Sinopec Group 19%. It is unclear how the assets will be evaluated and integrated. Experts estimated that the pipeline business generated 35% of CNPC’s profit in 2018.

The government also appointed Li Fanrong, deputy director of China’s National Energy Administration and former CEO of CNOOC Ltd., as the president of CNPC. Li will fill a vacancy left by Zhang Wei, who left CNPC to head the new China Oil & Gas Piping Network.

Contact reporter Han Wei (weihan@caixin.com)


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