One of China's provincial shales gas and oil producers is preparing for an ambitious initial public offering.
Yanchang storage facilities Image: Shaanxi Yanchang |
Producing only 250,000 barrels-per-day in the first half of 2012, Shaanxi Yanchang Petroleum Group is dwarfed by China's three major oil companies Sinopec, PetroChina and CNOOC. Nonetheless, the ambitious state-owned producer is currently undertaking the necessary preparations for a public listing and will release timelines and other details in the near future.
While based in the landlocked Shaanxi province, Yanchang plans to take up overseas oil and gas exploration and further domestic shale gas development. It currently owns onshore oil blocks in 11 provinces and is earmarked to produce 1,000 retail fuel stations by 2015.
With 109,000 employees, Yanchang is a major employer in the province and is certainly the largest taxpayer - contributing 16% of the local government's revenue last year. The company missed out on a major shale block auction in 2011 due to limited resources, so a large capital injection from an IPO would certainly increase its weight in future bids.
The provincial energy firm already has ties with two of China's majors, CNPC and Sinopec, with whom it sells refined oils products, as well as a joint venture with US engineering firm KBR Inc. and a deal with Royal Dutch Shell PLC to build 100 retail fuel stations in Shaanxi.