China Ends Environmental Ban on CNPC, Sinopec Refining Projects

China’s government removed its two biggest oil and gas companies from an environmental blacklist after their operations posted drops in pollution last year.

Overturning an eight month-old ban, China National Petroleum Corp. and China Petrochemical Corp. can resume applying for clearance from the Ministry of Environmental Protection for new refining and petrochemicals projects, the ministry said today on its website.

CNPC, China’s biggest oil and gas company and parent of PetroChina Co., and Sinopec Group, Asia’s biggest refiner and parent of China Petroleum & Chemical Corp. known as Sinopec, were banned from seeking environmental clearances in September 2013 following a review of their emissions in 2012. The ban effectively prevented the companies from building new refineries and petrochemical facilities.

The nation’s energy companies have generally been reducing spending on downstream businesses to focus on capturing more supply. CNPC Chairman Zhou Jiping said in March that the company will spend most of its capital on natural gas exploration and production in China, and would be more cautious in investing in new refineries and chemical plants.

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