CNPC Considers Restructuring Engineering Units Amid Crude Plunge

  • State-run energy giant seeks to create sustainable business
  • Jiemian reports units may merge to deal with lower oil prices

China National Petroleum Corp. is considering a restructure of its petroleum engineering units as the country’s biggest oil and gas explorer looks for ways to weather the oil plunge.

The Beijing-based company is studying how to rearrange the structure of its engineering units to cope with the shifting industry landscape and the challenges of low crude prices to create a sustainable business, a company spokesman said Friday, asking that he not be named, citing company policy.

Earlier Friday, Chinese financial news website Jiemian reported that China Petroleum Engineering & Construction Corp. may take over China Petroleum Engineering Co., citing an unidentified CPECC official. The Beijing units of the two companies will merge with China Huanqiu Contracting & Engineering Corp.’s upstream business, it reported. All the companies are CNPC units.

CNPC’s flagship listed unit, PetroChina Co., said last month that its cutting oil and gas output for the first time in 17 years, after it posted a 67 percent drop in profit to the lowest since 1999.

Chairman Wang Yilin said in February that the company plans to spin off its oilfield services business as part of its efforts to streamline and become more efficient. The state-run energy giant will will be among the first of the nation’s sprawling state-run enterprises to undergo reforms, people with knowledge of the situation said last month.

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