Chinese oil major PetroChina has signed an agreement for $386.6 million to acquire assets that include 2,994 gas stations, 478 oil depots, 5,337 pieces of land, and some office buildings from state-owned China National Petroleum Corp.
The acquisition will be completed on Sep 30, 2002 or the date the precedent conditions are satisfied, whichever is later.
PetroChina's activities include oil and gas exploration and production; refining, transportation, storage and marketing of crude and products; production and sale of basic petrochemical products; and transmission and sale of gas.
PetroChina said as an integrated oil company with a core focus on upstream business, it was looking to expand its downstream sales network. The CNPC assets being acquired accounted for more than 80% of the local market for refined products and more than 60% of the local retail market in their areas.
The consumption of oil products in the areas in which the enterprises are located was expected to increase by at least an average 3% per annum, it added. PetroChina's board of directors believes the operating losses suffered by the enterprises in the past two years were primarily due to a shortage of funds, reduction in sales, overstaffing, and high costs. Their profitability could be improved significantly through "continuous reorganization", the board added. ©