PetroChina, BP launch gas station venture

PetroChina and BP, the largest Chinese and European oil firms, launched a gas station business joint venture in Guangdong Province in south China, marking a further move in BP's foray into China's booming oil fuel retail market, the China Daily reported Friday.

The venture, 51 percent held by PetroChina, was set up as a result of a memorandum of understanding reached with BP's acquisition of 20 percent of the listed shares from PetroChina's global initial public offering as the sole strategic investor in 2000.

Called BP PetroChina Petroleum Co. and registered in the city of Jiangmen in Guangdong, the joint venture comes after the launch of another BP joint venture with Sinopec, China's largest oil refiner, for running 500 gas stations in eastern China's Zhejiang Province earlier this month.

The Chinese government has also approved a joint venture between Royal Dutch Shell and Sinopec for Jiangsu Province, with more Sino-foreign ventures also waiting for a go ahead.

The Guangdong venture is allowed to run 500 gas stations with a total investment of about 4.7 billion yuan (566.27 million US dollars), compared with the 358 stations it was running at the end of September, said Graham Body, general manager of the venture.

The Guangdong market is highly competitive, being dominated by Sinopec, which runs 36 per cent of the 5,500 gas stations in the province and holds 49 per cent of the market share, in terms of sales volume.

BP PetroChina Petroleum Co. hopes to increase its market share from a present 20 percent to 25 percent initially, Body said.