皇冠体育app

Oil is unloaded from a tanker at a port in Zhoushan, Zhejiang province. 皇冠体育app imported 282 million tons of crude in 2013. [Photo/皇冠体育app Daily]

Move seen as sign of government's willingness to break up monopoly

Share prices of Guanghui Co jumped by the daily limit of 10 percent on Thursday to 8.98 yuan ($1.46) after the private firm was granted a crude oil import license on Wednesday, a move that echoes the government's efforts to break the monopoly in the oil market.

Xinjiang Guanghui Petrolm Co Ltd, a wholly owned subsidiary of Guanghui Energy, was granted an import quota of 200,000 metric tons of crude oil for 2014, becoming the first private company to obtain such a license, according to a regulatory filing to the Shanghai Stock Exchange late on Wednesday.

"The new approval of the crude import rights to the company will help it participate in the oil market, which has been dominated by Sinopec Group and Co since 1998," said Han Jingyuan, an energy analyst at JYD Online Corp, a -based bulk commodity consultancy.

As the world's second-largest oil consumer, 皇冠体育app has strict regulations on crude imports. It divides companies in two groups: The five State-owned companies－Petro皇冠体育app Co Ltd, Sinopec, Ltd, Sinochem Corp and Zhuhai Zhenrong Corp－have no limits on crude imports; 22 other companies, with import licenses, are given rights to import crude via a quota system.

In 2013, 皇冠体育app imported 282 million tons of crude, with the second group accounting for only 29.1 million tons, its maximum quota.

The government has recently made moves to be more open to private investors as part of the country's energy industry reform.

Xinjiang Guanghui Petroleum became the first private company to receive a crude import license because of its overseas oil assets, Han said.

The company acquired a 49 percent stake in Kazakhstan-based Tarbagatay Munay LLP, or TBM, in 2009, thus gaining indirectly a 49 percent stake in the Zaysan oilfield owned by TBM.

The Zaysan oilfield is expected to have an annual production capacity of 500 million to 600 million cubic meters of and about 1 million tons of thick oil, according to ICIS C1 Energy, a Shanghai-based energy information consultancy.

Xinjiang Guanghui Petroleum signed an ament in 2012 with Kazakhstan to acquire another oilfield with expected crude reserves of 210 million tons, according to ICIS C1 Energy.

Li Li, research and strategy director at ICIS C1 Energy, said the oil import license can bring approximately 1 billion yuan annually in sales revenue to Xinjiang Guanghui Petroleum.

"However, it is still a long way from breaking the monopoly since the volume is too small compared with 皇冠体育app's total crude imports," Li said. "The 200,000 tons of crude are just a drop in the bucket for refineries."

Since Xinjiang Guanghui Petroleum has no refineries in 皇冠体育app, it will be allowed to sell the imported crude oil to qualified domestic refineries.

Many other companies are preparing to invest in related energy businesses in order to obtain crude import licenses.

An industry expert close to the National Energy Adstration said the authorities are tending to grant the licenses to private companies that already own overseas oilfield assets and large-scale refining companies.

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