China's Three Major Oil Companies Change Leaders   

In April, all three of China's major oil companies changed leaders unexpectedly.
    Su Shulin, Sinopec Group chairman transferred to become deputy secretary of Fujian Provincial Committee. China National Offshore Oil Corporation (CNOOC) chairman and general manager Fu Chengyu, who is approaching retirement age (60), replaced Mr. Su as chairman. Also, Wang Tianpu, Sinopec Corp president will be promoted to group general manager as everyone expected.
  Meanwhile, the State-owned Assets Supervision and Administration Commission (SASAC) announced the appointment of Wang Yilin to replace Mr. Fu as chairman of CNOOC. Wang Yilin leaves the post of vice president of PetroChina, in the third leadership tier of China National Petroleum Corporation (CNPC). Although Jiang Jiemin, general manager of PetroChina has not changed so far, sources say he will take a position as a government official and SASAC may send a successor.
   The reshuffling of major executives at the three oil giants took people by surprise within the industry. But people close to major executives see signs that the new arrangements are for a transitional period, and they expect SASAC will follow up by promoting a younger team for the central enterprises in the future.
   Sinopec's new headquarters building and CNOOC's HQ face each other across the second ring road in Beijing, with only a ten minute walk in between. But for Fu Chengyu, moving from CNOOC to Sinopec Group, the difference in value between the two companies is enormous. Among the 2010 Fortune Global 500, Sinopec's operating income ranked No.7 at US$187.5 billion; CNOOC's revenue, US$30.7 billion, ranked No. 252.
   Fu Chengyu is not yet serving as general manager of Sinopec Group. According to reports, its current president Wang Tianpu may take the group's general manager position. Mr. Wang, now 49, became a vice president of Sinopec Corp.at age 38 and has been groomed for succession all along.
   Meanwhile, at CNOOC headquarters Wang Yilin will become the new chairman of the board. Until April 8, he was deputy general manager of PetroChina. As a student Mr. Wang, now age 55, majored in petroleum geology exploration. He has been responsible for energy development in the Xinjiang area.
   But some insiders at CNOOC do not think Wang Yilin is the right one to lead CNOOC forward in land oil business. "CNOOC's main work has been to take crude oil from under the sea. The next phase of business development will focus on building up the downstream industry chain for integration."
   CNOOC already has a petroleum refinery in Huizhou, Guangdong province. Around 2015, CNOOC plans to build three ten million-ton oil refineries to establish its second large-scale integrated oil refining base. By 2020, CNOOC plans to be a world leader in  the oil refining business.
   In fact, in May 2010, CNOOC set up a new generation of leadership. Five new deputy general managers named at that time are Li Hui, Lu Bo, Yang Hua, Liu Jian and Li Fanrong. This shows that the intersection of old and new leadership has entered crucial period.
   Su Shulin, the chairman of Sinopec Group who has left to serve as a government official, completed the Sichuan Gas-to-East China Pipeline Project during his tenure. The project started August 31, 2007 and cost RMB62.6 billion in total. It began commercial operation in 2010, thus strengthening the Sinopec gas business. However, to compensate for its deficiency, the group still needs to make great efforts. Su Shulin set a new goal for Sinopec Group - overseas oil and gas properties shall account for 50% of the group's holdings at the end of the "12th Five-Year Progran" period. Sinopec Corp reported revenues of RMB1 913 billion in 2010.
   But currently, Sinopec Corp is very far behind PetroChina in its capability to pump oil from the earth. In 2010, PetroChina's crude oil production was 858 million barrels, 2.6 times as much as Sinopec Group's 328 million. As for natural gas output, PetroChina's was 62.86 billion m3, five times Sinopec's 12.5 billion m3.
   Catching up with PetroChina in the upstream area has now become successor Fu Chengyu's task at Sinopec Corp.