PetroChina sticks to integration

A senior executive of PetroChina has said the energy giant will stick to its integration strategy, dispelling doubts about a plan to split the company in the aftermath of a corruption scandal.

The executive, who spoke on condition of anonymity, said the management believed the best choice in the short to medium term was not a split, adding the National Development and Reform Commission (NDRC) approved the company's strategy to promote the natural gas business, according to Saturday's Shanghai Securities News.

The China National Petroleum Corporation (CNPC), Asia's largest oil and gas producer and parent of PetroChina, sacked four senior executives who are under investigation for "serious violations of discipline" in August.

The four executives were Wang Yongchun, deputy general manager of the CNPC; Li Hualin, deputy general manager of the CNPC; Ran Xinquan, vice president of PetroChina Company Ltd.; and Wang Daofu, chief geologist of PetroChina.

Considering the scale of PetroChina, the company's reform will be a slow, gradual process, said Lin Boqiang, director of the China Center for Energy Economic Research at Xiamen University.

Several foreign banks including Credit Suisse and Standard Chartered predicted that no split would occur in the short term because it would not suit the line of business and would be difficult to carry out.

In response to rumors that PetroChina will spin off downstream assets, the company has made it clear that it will accelerate growth of its natural gas business.

Some analysts said a split may occur when the natural gas business expands to a certain size, but private company owners think the giant may invest overseas rather than split its domestic business as few domestic companies can compete with PetroChina in terms of technology and government support.

The monopoly has not only annoyed private companies but another oil major Sinopec which specializes in downstream production.

Nevertheless, the energy giant will introduce private capital into its industrial chains in the future.