China’s CNPC considering oilfield services IPO amid reform drive
Country’s biggest oil and gas producer follows in footsteps of Sinopec and CNOOC
China National Petroleum Corp (CNPC), the country’s biggest oil and gas producer, plans to spin off its oilfield-services business, chairman Wang Yilin said in Houston on Tuesday.
CNPC was considering an initial public offering of the oilfield services business as part of its efforts to streamline and become more efficient, Wang said in a speech at the IHS CERAWeek conference. He did not provide details on timing or how large a stake would be spun off.
The move comes amid President Xi Jinping’s overhaul of the state-owned sector as the world’s second-largest economy heads for its slowest growth in a quarter of a century. CNPC’s listed unit, PetroChina, has sold off pipeline assets in recent months while China Petroleum & Chemical Corp (Sinopec), Asia’s biggest refiner, agreed to sell a stake in its retail business in 2014.
With the severe downturn in the industry and low valuations, the timing is not good
“This CNPC drilling business spin-off is part of China’s state-owned enterprise reform blueprint,” Gordon Kwan, head of Asia oil and gas research at Nomura in Hong Hong, said. “State-run oil companies have been implementing cost-cutting reforms together with asset restructuring amid depressed energy prices.”