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BP is close to securing the government's go-ahead for joint ventures with two dominant domestic oil companies operating hundreds of petrol stations in China.
The approval, likely to be announced in the next few months, would help BP formally crack the lucrative retail market in China for petrol and diesel for the first time -- a market that is expanding by 4 or 5 per cent a year.
"The joint venture with PetroChina in Guangdong Province and the one with Sinopec in Zhejiang Province are set to receive the government's approval soon," said BP China spokesman Michael Zhao. "I am very optimistic."
Earlier last year, BP agreed with Sinopec, the second largest oil company in China, to jointly invest US$254 million to set up the joint venture in Zhejiang. The joint venture aims to run 500 petrol stations during the next three years in the coastal province. Sinopec holds 60 per cent of the joint venture "at the initial stage," while BP holds the rest.
In Guangdong Province, BP has already partnered with PetroChina, China's largest oil producer, operating 300 retail outlets under the brands of both companies. But the joint venture has yet to be given the green light by Beijing.
Zhao made the remarks at a ceremony for the establishment of the Tsinghua-BP Clean Energy Research and Education Centre on Tuesday, which is an independent research institution under the prestigious university.
Zhao said that China will become the third largest market for BP, only trailing its home market in Britain and the United States.
To cash in on the fast-growing market, BP has decided to increase its investment in China by US$500 million annually in the coming years.
BP has already poured US$4 billion into China, operating diversified businesses from producing oil and petrochemical products to supplying liquefied natural gas.
(China Daily July 24, 2003)
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