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.