Sinopec Corp. To Invest in Overseas Refinery and Petrochemical Assets

Sinopec Corp. of China is establishing a new entity to invest in refinery and petrochemical assets abroad in an effort to leverage its expertise and deep pockets to expand globally as domestic Chinese oil demand approaches a plateau.

Sinopec Overseas Investment Holding, which was quietly launched in late June as its sole platform for investing in, building, and operating refineries abroad, is building a team and setting a budget for the new entity, according to two company officials.

The global push by Asia's largest refiner comes as China limits new refinery approvals at home due to slowing demand growth and overcapacity, as the industry shifts to higher-end materials and energy transition products, and as the industry shifts to higher-end materials and energy transition products.

Sinopec will "expand overseas refining and chemical business by taking full advantage of the group's core strength", Zhao Dong, president of parent company China Petrochemical Corp, was quotes as saying in late June when Sinopec announced the new entity in an in-house newsletter.

Sinopec declined to comment on the specific regions or assets it is targeting, but a senior company official, who did not want to be identified because he is not authorised to speak to the media, said Sinopec will prioritise locations where demand is growing and feedstock is readily available.

One such investment could be in Sri Lanka, where Sinopec has been shortlisted to compete for an export-oriented refinery in Hambantota worth billions of dollars.

According to Reuters, Sinopec is one of the companies looking into Shell's Singapore refinery and petrochemical assets, though its president denied such interest this week.