Hutchison, Petrochina, CNPC plan oil Web portal
Hutchison, Petrochina, CNPC plan oil Web portal
HONG KONG (Reuters): Hutchison Whampoa Ltd, China National Petroleum Corp (CNPC) and PetroChina announced on Tuesday an agreement to establish a business-to-business (B2B) Internet portal for the oil and gas industry in China with total investment of US$15 million.
In its first phase, the portal will set up a comprehensive electronic marketplace for all oil and gas products and related services in China, the companies said in a joint statement.
Chinese oil major Petrochina, a recently listed subsidiary of state-owned CNPC, is committed to using the joint venture portal for about half of its annual procurement spending of about 40 billion to 50 billion yuan next year, said Huang Yan, Petrochina vice chairman and president.
"It is expected the online procurement could save about 5 percent of the procurement costs of Petrochina," he told a news conference.
Huang added that the company will gradually migrate sales activity to the portal.
"Initially we want to focus on procurement, however we will gradually move PetroChina's sales, on the revenue side, also on the portal," he said.
Petrochina's revenue exceeded 170 billion yuan in 1999, including sales of crude oil, natural gas, refinery and chemical products.
"The portal will provide trading, content, logistics, credit and other value-added services to oil and gas industry participants in China," the statement said.
Huang also said he hopes the portal will break even in three to four years time.
Petrochina will hold 35 percent of the new venture, while CNPC and Hutchison will hold 25 percent each.
The other founding partners of the portal venture are China Construction Bank, BOCI Investment Ltd, and Goldman-Sachs (Asia), each of which holds three percent. The remaining six percent of the company will be allocated to management of the new venture.
China Construction Bank and Bank of China, among other Chinese banks, will work with the portal to develop online financing, payment and settlement services.
Goldman Sachs and BOCI Asia are the joint financial advisers to the project.
Hutchison and its controlling shareholder Cheung Kong (Holdings) are strategic investors in PetroChina. Hutchison holds 811.09 million shares or 0.46 percent of the company and Cheung Kong has 405.55 million shares represented 0.23 percent of PetroChina.
Hutchison, Cheung Kong and Sun Hung Kai Properties said last week they had no intention of cutting their stakes in PetroChina.