Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

China’s CNPC to spin-off non-energy assets with 140,000 employees

China news

China National Petroleum Corp. plans to spin off most non-energy assets — a portfolio comprising roughly 10 percent of its workforce — as low oil prices force the state-run behemoth to streamline, according to people with knowledge of the matter.

Under a plan detailed at an internal meeting in Beijing last month, CNPC would bundle businesses employing about 140,000, including hotels, hospitals, schools and utility companies, into regional units, said the people, who asked not to be identified because the information isn’t public. The reorganization, which would see the assets taken over by local governments or folded into joint ventures with outside investors, must be completed before 2019, the people said.

A Beijing-based spokesman for CNPC, which employed 1.46 million people as of last year, said Monday the company was unable to immediately comment. State-owned Assets Supervision and Administration Commission, which oversees government-owned companies, didn’t respond to a faxed request for comment.

Most employees covered by the plan work in unprofitable units that supply and service CNPC operations in remote areas of the country, the people said. The majority of the divisions to be sold off are wholly owned by CNPC and aren’t part of PetroChina Co., its main publicly listed unit that employs more than half a million people.

PetroChina added 0.6 percent to HK$5.16 as of 9:48 a.m. in Hong Kong, while the city’s benchmark Hang Seng Index gained 0.6 percent.

CNPC is the world’s sixth-biggest employer, according to data compiled by the World Economic Forum and Bloomberg. By comparison, Exxon Mobil Corp. — the world’s largest oil company by market capitalization — has 73,500 workers, according to data compiled by Bloomberg.

‘Zombie’ Reforms

President Xi Jinping’s government has been pressuring state-owned enterprises to overhaul or shut unprofitable “ zombie” companies as part of broader restructuring of the world’s second-largest economy. CNPC has come under additional pressure from a two-year slump in oil prices that’s forced it to sell assets and cut high-cost production.

While Brent crude has recovered from 12-year low in January, the global benchmark has averaged about $44 this year, less than half 2014 levels.

CNPC was recently compelled to sell pipeline assets to meet annual profit targets set by regulators. PetroChina’s net income in the first nine months of this year, fell 94 percent to 1.73 billion yuan ($253 million), even after incorporating the 24.5 billion yuan pipeline sales, the company said last month. Full-year results are expected to “decrease substantially” from last year.

Chairman Wang Yilin said in March that the company wouldn’t cut front-line oil-and-gas workers as it seeks to reduce costs.

“We are not like international oil companies where layoffs are the most convenient way to cut cost in the capitalist world,” Wang said during an interview. “We won’t have massive employees layoffs despite facing challenges from a low oil price.”

Recommended for you

More from Energy Voice

Latest Posts