London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950
info@mrcplast.com

Our Clients

Order Informer

 
Home > News >
 

Sinopec suspends top officials at trading arm

January 08/2019

MOSCOW (MRC) -- Sinopec has suspended two top officials at its trading arm Unipec and is evaluating the details related to certain crude oil transactions that have incurred some losses, reported Reuters with reference to the Chinese state oil company.

Unipecs President Chen Bo, an industry veteran who helped the company become one of the worlds largest oil traders, has been suspended along with the senior Communist Party representative at the company, Zhan Qi, Sinopec said in a filing to the Hong Kong stock exchange.

"The Company was informed that Unipec incurred some losses during certain crude oil transactions due to the oil price drop. The Company is currently in the process of evaluating the details of such circumstance," Sinopec said.

Reuters earlier reported Chen Bo and Zhan Qi had been suspended after Unipec suffered losses, citing five sources. Neither Chen nor Zhan could immediately be reached for comment.

Vice president Chen Gang has been appointed to handle the companys administrative work, Sinopec added in the filing.

"The government inspectors were looking into the companys operations for the past few years ... one of the problems they found was the severe trading losses in the second half of this year because of wrong market judgment," one of the sources said.

The sources did not refer to any wrongdoing on the part of the two men.

Benchmark Brent and West Texas Intermediate (WTI) oil prices have fallen by about 40 percent since hitting their highest in four years in October, amid oversupply concerns as major producers ramped up output while the United States unexpectedly issued waivers that allowed countries to continue importing Iranian oil despite sanctions.

A sudden widening of WTIs spread with Brent earlier this year also led to hefty losses at major traders.

Chen Bo, who rose through the ranks to take on Unipecs top role, started the companys liquefied natural gas (LNG) trading desk.

He also advocated boosting Chinas crude oil imports from the Americas to help the worlds largest oil importing country to diversify its suppliers.

Oil traders said Chens removal could create uncertainty at Unipec.

"Hes been a key man in the oil trading industry in the past decade," said a veteran oil trader in Asia.

Shares in Sinopec closed at 5.25 yuan (USD0.76) on the Shanghai Stock Exchange, the lowest in two years and down 6.7 percent from 26 December 2018.

"Sinopecs stock has been performing badly in the fourth quarter," said a Beijing-based equity analyst who cannot be named due to local stock exchange rules. The news today caused "a selloff and decline in prices," the analyst added.

In October, Sinopec reported that third-quarter net profit fell from the previous quarter, after rising for five consecutive quarters.

For the first nine months of 2018, the company reported a loss of 5.47 billion yuan (USD794 million) from foreign exchange rate changes and holdings in derivative financial instruments, according to financial reports issued in October.

In the first nine months of 2017, the company reported a gain of 1.13 billion yuan.

Of the 2018 losses, 4 billion yuan occurred in third quarter, according to Reuters calculations based on the financial reports.

Sinopec does not provide a breakdown for revenues at its trading unit.

As MRC informed previously, in September 2018, Sinopec Corp joined a group planning to build an oil refinery in Alberta, an enterprise that would strengthen demand for the Canadian province's heavily discounted crude. State-owned Sinopec, formally known as China Petroleum & Chemical Corp, along with an Alberta indigenous group, China State Construction Engineering Corp and Alberta management company Teedrum, plan to build a refinery to process 167,000 barrels per day of crude into gasoline and other products, the project's consulting firm Stantec Inc said in its statement.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in 2012.


mrcplast.com
Author:Margaret Volkova
Tags:crude and gaz condensate, Crude oil, Sinopec, China.
Category:General News
|
| More

Leave a comment

MRC help

 


 All News   News subscribe