China Petroleum and Chemical Corp., also known as Sinopec, announced on February 19 that its board had approved a resolution to restructure the company’s oil retail unit by selling up to 30 percent of it to private investors. According to Barclays analyst Somshankar Sinha, the sale could raise more than $20 billion for the state-owned oil giant.
Sinopec’s oil unit contains 30,532 gas stations across China as well 6,215 miles of oil pipelines. According to Bloomberg, the unit posted an operating profit of $4.4 billion in the first nine months of 2013 and contributed more than 70 percent of all Sinopec sales in 2012.
The move represents Sinopec’s efforts to follow China’s top oil and gas producer—PetroChina Co.—in its push to increase private ownership as part of state-owned enterprise reform. In June 2013, PetroChina sold a 50 percent stake in one pipeline project to private investors. According to Reuters, PetroChina’s decision to divest has raised billions of dollars from domestic institutional investors.