- Company to make strategic decisions, divest daily management
- Reform will take years to complete, plans not finalized
China National Petroleum Corp., the country’s energy giant, will be among the first companies of the nation’s sprawling state-run enterprises to undergo reforms, according to people with knowledge of the situation.
Under the pilot plan, CNPC will be transformed into a strategic holding company and no longer manage day-to-day operations of its various subsidiaries, including PetroChina Co., according to the people, who asked not to be identified because the information isn’t public. The new capital-investment company will monitor financial performance and make strategic decisions, revamping a corporate structure in place since the 1990s, said the people.
CNPC is among a few state-owned companies selected for the trial by the State-owned Assets Supervision and Administration Commission, said the people. A Beijing-based spokesman at CNPC didn’t immediately respond to e-mailed questions. SASAC spokesman Lu Weidong and the National Development and Reform Commission didn’t respond to faxed questions.
The change is part of President Xi Jinping’s plans to overhaul the country’s $18 trillion state-owned sector, cut overcapacity and improve efficiency. Trials, including mergers and restructuring of government-owned companies, will be in full swing this year, SASAC deputy director Zhang Xiwu said last month.
Profit at CNPC, parent of the world’s second-biggest publicly traded energy company, PetroChina, has been wiped out by falling crude prices and China’s slower economic growth. CNPC wants to use the reform opportunity to accelerate internal restructuring and spin off units, according to the people. It may take years for the changes to take shape as both SASAC and CNPC have yet to draw up detailed plans, said the people.
— With assistance by Keith Zhai, and Guo Aibing