BP Cleared For 300 China Petrol Stations, Sees More

Guangzhou, November 4 | Updated: Nov 5 2003, 05:30am hrs
BP Plc said on Tuesday it had won Chinas approval to set up 300 petrol stations in fast-growing Guangdong province, becoming the second foreign oil firm to get a major foothold in the lucrative retail market.

The British firm, the worlds third-biggest oil company, also said the authorities may give it the green light for another 500 sites in Zhejiang province in months.

BPs approval came after Royal Dutch/Shell received clearance in August to set up 500 petrol stations in eastern Jiangsu province with Chinas number two oil and gas producer, Sinopec Corp.

"We have the approvals and are going through the formalisation of the joint venture agreement," chief financial officer Bryan Grote said at a press briefing in Guangzhou.

BP will team up with Chinas largest oil and gas producer, PetroChina Ltd, to jointly operate the 300 stations in Guangdong, which expects to see economic growth of above 12 per cent this year.

BP China president and chief executive Gary Dirks said the companys joint venture agreement for another 500 stations with Sinopec in Zhejiang was still awaiting central government approval. "We expect approval within months," Mr Dirks said. "Its very difficult to predict."

The go-ahead for BP and Shell came after about two years of negotiations, during which Chinas state oil firms raced to build market share before competition kicked in. ExxonMobil is expected to receive approval for similar ventures soon. The three foreign firms won entry tickets to the state-controlled retail market in 2000 when they bought a combined $2.65 billion worth of shares in stock offerings of Sinopec, PetroChina and CNOOC Ltd. (Reuters)