Sun Weijie, chairman of Yantai Jereh Oilfield Services Group Co., has become a billionaire as shares of the Chinese oil equipment and service provider he co-founded surged to a record on news of a supply contract from Venezuela.
Jereh has been picked by Venezuela’s state oil company Petroleos de Venezuela S.A to supply equipment and tubes valued at $178 million, the Yantai, China-based company said on Jan. 10. The deal is equal to 40 percent of Jereh’s sales in 2012.
Jereh shares climbed 10 percent, the daily limit, on Jan. 11 in Shenzhen trading and hit a record 59.60 yuan yesterday. The stock has gained 19 percent since the deal was reported and 84 percent in the past 12 months. Sun is the largest shareholder with 121 million shares worth $1.14 billion, a 26 percent stake, according to data compiled by Bloomberg News.
“The fact that Jereh has received major orders from overseas suggest its product quality has been recognized by the global market and the company has acquired global competitiveness,” Pang Linlin, an analyst with Hongyuan Securities wrote in a note to clients on Jan. 14. “It is expected to get more orders from overseas market.”
Global oil consumption will climb to a record 90.11 million barrels per day in 2013 and rise to 91.46 million in 2014, the U.S. Energy Department forecast this month. The agency also increased crude-oil price projections for 2013.
Venezuela, the biggest oil exporter in the Americas, has the largest petroleum reserves in the world. It has become the biggest recipient of Chinese credit in the region as the nationalization of more than 1,000 companies and currency and price controls drive away other lenders.
Sun, 49, worked at a vocational school affiliated with a gold mining company before founding Yantai Jereh in 1999, according to the company’s website and Sun’s biography on the Shenzhen Stock Exchange.
Cheng Yongfeng, board secretary of Jereh, declined to comment on Sun’s net worth yesterday and said Sun couldn’t be reached.
Profit of Jereh, based in eastern China’s Shandong Province, increased 50 percent in 2011 to 424 million yuan ($68 million). Overseas revenue accounted for about a third of the company’s sales in 2011, up from 22 percent in the previous year, according to data compiled by Bloomberg.
Sun, along with other two founders Wang Kunxiao and Liu Zhenfeng, first sold shares in the company in January 2010 on the Shenzhen Stock Exchange. Its share price has more than doubled since the initial public offering.
Zong Qinghou, chairman of beverage maker Hangzhou Wahaha Group Co. is China’s richest man with a net worth of $16.6 billion as of Jan. 16, ranking him No. 47 in the world, according to the Bloomberg Billionaires Index.
The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York. The valuations are listed in U.S. dollars.