State-controlled Chinese energy giant Sinopec has selected 37 potential buyers for a 30 percent stake in its fuel marketing unit, which analysts value in the region of $20 billion, the company's chairman told a press conference announcing Sinopec's first-half results.
"The reaction from investors, from the market, is better than we originally expected," Sinopec chairman Fu Chengyu told news agency Reuters.
Chengyu added that the group of potential buyers consisted of 37 consortia, with each consortium including various enterprises or funds, and that the shortlisted bidders are currently filing binding bids. The company expects to complete the sale by the end of the third quarter.
Sinopec's fuel marketing and distribution unit, which also includes a wholesale arm, consists of over 30,000 gas stations, 23,000 convenience stores, as well as oil-product pipelines and storage facilities, Reuters reports.
Sinopec reported in its half-year results that the total revenue of the division slid slightly by 0.8 percent to 727 billion yuan, with non-fuel revenues rising by 10 percent to 7.2 billion yuan. Operating profit in the period increased by 11.5 percent year-on-year to 18.8 billion yuan.
Fu Chengyu also said at the press conference that he expects China's shale-gas production to increase sharply in the long run, due to technological improvements that can cut drilling costs to $50 million per well from $80 million within three to five years.
He added that Sinopec's Fuling shale-gas field in Sichuan province has the capacity to increase production to 10 billion cubic meters by the end of 2017.