Sinopec and PetroChina Merger Rumor, Chinese Netizen Reactions

Foreign Media: Chinese Officials Considering Merging Sinopec and PetroChina

Beijing Times report — Yesterday [23rd], on the first day the Hong Kong Stock Exchange resumed trading after the holidays, Sinopec dropped 1.074%, while during trading on the Chinese New Year’s Eve (February 18th), Sinopec’s Hong Kong shares had rose 4.65% on rumors that it would be merged with PetroChina [aka China National Petroleum Corp or CNPC].

On the day before Spring Festival [Chinese New Year’s], there were overseas media reports that government officials were considering and studying the feasibility of merging of the “three barrels of oil” [Sinopec, CNPC, and CNOOC], with one of the proposals merging CNPC and Sinopec while another proposal merging Sinopec and China National Offshore Oil Corporation [CNOOC]. Influenced by this rumor, the last Hong Kong Stock Exchange trading day before the holiday saw Sinopec shares jump 4.65%, with shares for CNPC and CNOOC also increasing nearly 3%.

However, over the first four days of Spring Festival, neither government officials or the Big Three Oil companies made any statements regarding the aforementioned rumor, while reports from several research organizations believed that the possibility of a merger was small, so during yesterday’s trading on the Hong Kong Stock Exchange, Sinopec share prices had slumped as much as 2% for a time, CNPC was down 1.002% for the day, and CNOOC was down 2.812%.

One viewpoint is that the merger of the Big Three Oil is to promote the overseas competitiveness and profitability of a Chinese petroleum corporation. According to the latest Fortune 500 list published in 2014 July, Sinopec and CNPC have already surpassed American oil giant Exxon Mobil to become the world’s second and third largest oil companies, close behind Royal Dutch Shell. Ranked according to annual revenues: Shell at 459.6 billion USD, Sinoec at 457.2 billion USD, CNPC at 432 billion USD, Exxon Mobil at 407.6 billion USD. However, ranked according to annual profits: Exxon Mobil at 32.6 billion USD, CNPC at 18.5 billion USD, Shell at 16.4 billion USD, and Sinopec at 8.9 billion USD.

Xiamen University Energy Economy Research Center Director Lin Boqiang says if the focus is on overseas markets, the merging of the Big Three Oil will improve overseas competitiveness, but if we consider the domestic market, more competition between the three is better, as competition would increase efficiency. Reports from multiple research organizations believe the overall direction towards integrating the Big Three Oil is correct, but the likelihood is small. Multiple industry insiders say rumors of the Big Three Oil merging have been around for a long time, but the difficulty of actually doing so would be very large.

Comments from NetEase:

网易浙江省杭州市网友 ip：124.160.*.*

We actually don’t really need some oil company here [in China]. Just import from America. The oil quality would be good and would also be cheaper.

北洋大臣直隶总督袁世凯 [网易山东省济南市网友]：

From military affairs to the economy, from social issues to various voices, we all have tor rely on foreign media.

但尧 [网易北京市网友]：

China’s economy is a combination of a market economy and monopoly economy. When it comes to private enterprises [started by ordinary citizens] and foreign enterprises, it implements a market economy plus unwritten rules to make things difficult. When it comes to central state-owned enterprises, it implements a monopoly economy plus [government] protection. Against foreign enterprises, it brandishes an anti-monopoly cudgel, and while foreign enterprises can withdraw [from the market], private enterprises can only go under.

haojiumeiwancs [网易湖北省武汉市网友]：

The trend in state-owned enterprises merging is the beginning of overall monopolization.

网易辽宁省沈阳市网友 ip：113.225.*.*

When Didi Taxi and Kuaidi Taxi [taxi hailing app services] wanted to merge, you [the government] opposed on the basis of being against monopolies, but now you yourselves are merging. What a joke.

迎风背手 [一步成诗]：

If the four major banks [ICBC, CCB, BOC, ABC] were merged, never mind your money, first go wait in line.

网易江西省新余市网友 [jackiecaixun2015] ：

Automotive exhaust is too bad, the country must restrict automobiles, promote electrical vehicles, otherwise it will be very difficult to breathe oxygen, as all we’ll be breathing in is exhaust fumes!
Automotive exhaust is too bad, the country must restrict automobiles, promote electrical vehicles, otherwise it will be very difficult to breathe oxygen, as all we’ll be breathing in is exhaust fumes!
Automotive exhaust is too bad, the country must restrict automobiles, promote electrical vehicles, otherwise it will be very difficult to breathe oxygen, as all we’ll be breathing in is exhaust fumes!
Automotive exhaust is too bad, the country must restrict automobiles, promote electrical vehicles, otherwise it will be very difficult to breathe oxygen, as all we’ll be breathing in is exhaust fumes!
Automotive exhaust is too bad, the country must restrict automobiles, promote electrical vehicles, otherwise it will be very difficult to breathe oxygen, as all we’ll be breathing in is exhaust fumes!

网易北京市网友 ip：114.254.*.* (responding to above)

How is car exhaust pollution too bad? Those who don’t have cars or don’t understand cars should not blindly spout off. In fact, China’s automotive engine technology is comparable to international standards, and the skies in other people’s countries are very good, but why does it suddenly become “too bad” for you here? It can be said without any exaggeration that the exhaust fumes from cars is even more environmentally friendly than the fumes being emitted from people like you who speak irresponsibly.

网易辽宁省大连市网友 ip：175.162.*.*