BEIJING, Oct. 13, 2009 (Xinhua News Agency) -- Royal Shell, the Yanchang Petroleum Group and Shaanxi Tianli Investment announced on Monday that their joint venture, Shaanxi Yanchang-Shell Petroleum, has opened a tenth gas station in the central Shaanxi province and will build a total of 100 gas stations there.
It is the first time the companies involved have publicly confirmed their plan.
According to the announcement, the Yanchang Petroleum Group owns 46 percent stake in the joint venture and Shell holds 45 percent stake and the remaining 9 percent belongs to the investment company.
Xinhua-run Shanghai Securities News has reported that the Yanchang Petroleum Group and Shaanxi Tianli Investment may also inject capital to Shell's Sichuan branch with the same stake structure, indicating they intend to extend their presence over the whole country.
"Shell has teamed up with PetroChina (PTR.NYSE; 0857.HK; 601857.SH) and Sinopec (NYSE:SNP) (SNP.NYSE; 0386.HK; 600028.SH) in jointly running gas stations in Jiangsu and Zhejiang, but on no big scale, partly because China's oil products pricing mechanism in the past years was unreasonable," said a market analyst.
With the new fuel pricing mechanism in place to ensure profit margins for refiners and retailers, foreign oil firms may seek opportunities in China's fuel distribution sector.
Rumor has it that the French oil firm Total SA (NYSE:TOT) is also negotiating with Shandong's private-run oil firms to establish a sales company, and plans to build 100 gas stations in eastern China.
