Ma­jor crude firms plan to change their strate­gies as de­mand for tra­di­tional en­ergy de­clines

China Daily (Hong Kong) - - BUSINESS - By ZHENG XIN zhengxin@chi­

China’s oil ma­jors are pre­par­ing for the day when gaso­line de­mand dwin­dles and elec­tric-pow­ered cars rule the roads.

The big two op­er­a­tors, China Na­tional Petroleum Corp, or CNPC, and China Petroleum and Chem­i­cal Corp, or Sinopec, are mak­ing plans to di­ver­sify to rev up prof­its.

Last month, a re­port re­leased by CNPC Eco­nomics and Tech­nol­ogy Re­search In­sti­tute showed that gaso­line con­sump­tion will de­cline in China, from the 90 per­cent to 77 per­cent by around 2030.

“Oil will still play a dom­i­nant role in the global trans­porta­tion sec­tor for decades, but we are wit­ness­ing a grow­ing di­ver­sity in power sources, in­clud­ing nat­u­ral gas, elec­tric­ity and bio­fuel,” said Li Li, en­ergy re­search di­rec­tor at con­sult­ing com­pany ICIS China.

Still, the oil gi­ants are not tak­ing any chances as they look to cash in on ac­cel­er­at­ing hy­brid and e-car sales.

CNPC is start­ing to build charg­ing sta­tions in tar­geted cities and on ex­press­ways.

This is part of a strate­gic deal signed with FAW Group Corp last year to ex­pand into the new en­ergy ve­hi­cle and smart car sec­tor.

Its arch ri­val Sinopec has made moves into auto sales, based on its na­tion­wide gas sta­tion network.

The world’s largest re­finer also plans to in­crease its nonoil busi­ness, in­clud­ing e-com­merce, re­tail and ad­ver­tis­ing.

“Di­ver­si­fy­ing its busi­ness into auto sales is part of Sinopec’s ef­forts to build up a port­fo­lio and im­prove its op­er­a­tional ca­pac­ity,” said Zhao Ping, di­rec­tor of the in­ter­na­tional trade re­search depart­ment at the China Coun­cil for the Pro­mo­tion of In­ter­na­tional Trade.

“Sell­ing au­to­mo­biles will help Sinopec en­large its mar­ket,” she added.

But global oil and gas gi­ant Royal Dutch Shell still be­lieves there is a place for gaso­line, de­spite a myr­iad of new op­tions through hy­brids and e-ve­hi­cles.

The multi­na­tional com­pany stressed it will take decades be­fore the trans­port sec­tor and the broader en­ergy in­dus­try is oil free.

At the same time, it is build­ing for the fu­ture and will start in­stalling e-car charg­ers at gas sta­tions in the United King­dom be­fore the end of 2017.

Shell has put to­gether a part­ner­ship agree­ment with e-car in­fra­struc­ture com­pany Al­lego. Even Ben van Beur­den, head of the group’s oil divi­sion, said his next car will be hy­brid.

His com­ments came af­ter the UK and France an­nounced plans to ban the sale of diesel and gaso­line cars by 2040 in order to meet global warm­ing tar­gets.

Al­ready ma­jor au­tomak­ers are pre­par­ing for a greener to­mor­row.

Car gi­ant Volvo, which is part of Zhe­jiang Geely Hold­ing Group in China, will only man­u­fac­ture elec­tric or hy­brid ve­hi­cles from 2019 on­wards.

Sales in e-ve­hi­cles have shown re­mark­able growth in the past few years.

The Re­search In­sti­tute re­port ex­pects elec­tric cars in China to reach 3.17 mil­lion by 2020, 16 mil­lion by 2030, 42 mil­lion by 2040 and 135 mil­lion by 2050.


Tech staff carry out safety in­spec­tions at a nat­u­ral gas pro­duc­tion base in Suin­ing, South­west China’s Sichuan prov­ince.

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