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China's Oil Giants Are Working On A Plan For Joint Purchases

China's Oil Giants Are Working On A Plan For Joint Purchases

China's largest oil companies are discussing plans to form a group for joint purchases of hydrocarbons, including from Russia, according to Bloomberg.

According to Bloomberg, China Petroleum & Chemical, PetroChina, Cnooc, and Sinochem Group corporations are working on the details of a plan that will ideally allow them to facilitate participation in oil purchases on the spot market and strengthen their positions by consolidating resources. The preliminary plan found support from the Chinese government and the relevant industry regulator, Bloomberg points out.

According to his sources, the future Association will start with the submission of collective applications for the purchase of oil of Russian and African brands. Members of the future group control refineries that import more than 5 million barrels of oil per day. This is almost a fifth of the total production of OPEC countries. In theory, Chinese corporations can become the largest buyer of hydrocarbons in the world, the Agency notes.

According to him, the Chinese side may try to test its plan in July. We are talking about applications for the purchase of raw materials of the Russian ESPO grade (the Eastern Siberia - Pacific Ocean Pipeline system - ESPO). In the future, if successful, Chinese corporations may allow non-state-owned enterprises to join the group.