Sinopec: Employee demoted over expensive drink

Guangdong, April 26th, 2011 - SINOPEC has demoted the general manager of its Guangdong branch, Lu Guangyu, after his excessive spending on alcohol sparked public uproar.

At Lu's request, the Guangdong company bought 1,176 bottles of drink worth 1.59 million yuan (US$243,604), out of line with company policy, in September last year, Sinopec said yesterday.

The company said it had also ordered Lu to pay back 131,100 yuan for alcohol that had already been drunk and fined him an unspecified sum.

The scandal surfaced on April 11 when photocopies of invoices for the drink were posted online. The post claimed the Guangdong branch's purchases included 50-year-old Kweichow Moutai and 1996 Chateau Lafite Rothschild.

Some of the Moutai, a Chinese spirit traditionally drunk at state banquets, cost almost 12,000 yuan a bottle.

News of the lavish spending spread quickly, triggering public anger and prompting Sinopec to send a team from its Beijing headquarters to the southern province to investigate.

The revelations also came at a time when the government had just raised fuel prices to record high levels, a move that benefited Sinopec, China's premier oil refiner, which had long been lobbying for higher prices to compensate for losses caused by the soaring price of crude oil.

Fu Chengyu, the newly appointed chairman of Sinopec, told a briefing in Beijing yesterday that the case had seriously harmed the company's image and he pledged to crack down on such spending.

Lu had resold some of the bottles in October, Sinopec said.

The Guangdong branch had earlier said the purchases had nothing to do with Lu personally but were part of the company's normal operations.

Sinopec is the state parent of listed Sinopec Corp. - Shanghai Daily

Perth, April 21st, 2011 - Oil giant Sinopec on Thursday signed China's second-largest gas purchase agreement, worth around $85 billion over 20 years by one estimate, in a deal that also gives it 15 percent of an Australian gas-export project.

Sinopec will pay $1.5 billion for the stake in the Australia Pacific liquefied natural gas (LNG) project, completing a preliminary deal agreed in February with project developers ConocoPhillips and Australia's Origin Energy.

ConocoPhillips and Origin announced the deal at a joint news conference overseen by Australian Resources Minister Martin Ferguson.

"Australia very shortly become the second-largest exporter of LNG in the world and we have effectively now got a very important new industry in Queensland," Ferguson said, referring to the northern state where the project is to be built.

Australia has around $200 billion in LNG projects on the drawing board. Much of their exports are destined for China, which is looking to lock in supplies to feed its rapid growth and cut its reliance on polluting coal energy.

Australia Pacific LNG will have initial capacity of 4.5 million tonnes per annum (mtpa) of LNG, eventually ramping up to 18 mtpa, and is expected to come online at the end of 2015.

Sinopec's deal to take at least 4.3 million mtpa could be worth around $85 billion if pricing is similar to that of recent coal-seam gas supply deals done by Australian gas firm Santos, said CLSA analyst Mark Samter.

The price of $1.5 billion for the 15 percent stake is also well above similar deals made recently-- state-run Korea Gas Corp paid just over $600 million in cash to buy a 15 percent stake from Australian energy firm Santos and Malaysia's Petronas.

The project holdings of Conoco and Origin are now 42.5 percent each following Sinopec's equity investment, and the joint venture partners are still aiming to make a final investment decision by mid-2011.

Origin Energy shares were placed on a trading halt on Thursday. Sinopec shares were up 0.9 percent in Hong Kong.

CHINESE DEMAND RAMPS UP

China aims to boost gas consumption to 10 percent of its total energy use by 2020 as it tries to reduce greenhouse gas emissions by cutting the use of dirtier burning coal. It has spent tens of billions of dollars buying into energy resources from Africa to Latin America.

Energy consultancy Wood Mackenzie has forecast China's LNG imports to rise five-fold to 46 million tonnes by 2020.

"This will help Sinopec diversify its natural gas supply and meet the rapidly increasing demand of customers in China. Sinopec continues looking for more cooperation opportunities in Australia," Zhang Yaocang, Vice President of Sinopec Group, said.

Sinopec's deal will be second only to China's first LNG import deal sealed in 2002 when China National Offshore Oil Corp (CNOOC) secured 3.7 mtpa of gas from Australia's Northwest Shelf project for 25 years.

The deal will also be Sinopec's first venture into foreign unconventional gas assets and moves Australia Pacific LNG one step closer to meeting its target of making a final investment decision this year.

Sinopec is building its first terminal in eastern Shandong, which will be fed from ExxonMobil's Papua New Guinea LNG project. The latest deal will enable Sinopec to accelerate work at the proposed 17 billion yuan terminal in the southern coastal city of Beihai in the Guangxi region, which is expected to open in 2014.

The Beihai terminal will have an initial capacity of 3 million tonnes per year, expandable to 5 mtpa by around 2015 when Australia Pacific LNG comes online. - Reuters

Sinopec to Join Petrobras at Offshore Blocks, Gabrielli Says

Beijing, April 11th, 2011 - China Petroleum & Chemical Corp. will team up with Petroleo Brasileiro SA to develop offshore areas of the Para-Maranhao basin in northern Brazil after negotiating for a year, Brazil’s state-run producer said.

Petrobras Chief Executive Officer Jose Sergio Gabrielli, speaking to reporters in Beijing today, declined to give the financial terms of the transaction.

Last year, Petrobras announced a preliminary agreement to sell stakes in two blocks, BM-PAMA-3 and BM-PAMA-4, to Sinopec. Sinopec is keen to expand its overseas oil and natural-gas operations, Sinopec President Wang Tianpu said March 28.

Beijing-based Sinopec agreed last October to pay $7.1 billion for a 40 percent stake in Repsol YPF SA’s exploration assets in Brazil’s offshore Campos, Santos and Espirito Santos basins.

Brazilian President Dilma Rousseff is in China on an official visit to boost trade and investment between the nations and will meet with President Hu Jintao tomorrow.

Petrobras is investing $224 billion in the five years through 2014, the largest spending plan of any oil company, to increase oil and gasoline output. - Bloomberg

Sinopec boss returns to political path

Beijing, April 4th, 2011 - Su Shulin is stepping down as chairman of Sinopec Corp and returning to politics, where many believe he belongs.

The 49-year-old, who headed the Organization Department of the Communist Party in Liaoning for two years until 2007, has been appointed deputy secretary-general of Fujian.

Known as the Tiger of the Northeast, Su is following in the footsteps of several senior leaders who assumed Fujian posts before climbing to the top.

Among them are Vice President Xi Jinping, who is tipped as President Hu Jintao's successor, and Jia Qinglin, the chairman of the National Committee of the Chinese People's Political Consultative Conference. - The Standard