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The Four Petrochemical Giants

From the series Major industrial groups in China

When the People's Republic of China was founded in 1949, oil extraction in the country was practically non-existent, and the country was completely dependent on imports. The exploration and development of domestic oil resources required a major effort. As Jin Zhang reports in his book Catch-up and Competitiveness in China [Routledge, 2004]: The required massive human resources were supplied by the People's Liberation Army (PLA). In 1952, Mao Zedong ordered the reorganisation of the 57th Division of the 19th Army of the PLA into the 1st Division of Oil.

The effort led to the discovery of several oil fields, the most significant of which was in Daqing, Heilongjiang Province, in northeastern China, in 1959. It became operational the following year, reaching a production capacity of 6 million tons (mt) per year within three years. This was followed by the installation of a rudimentary refining industry, facilitated by aid from the USSR. In this way, crude-oil extraction and petrochemicals took their first steps in China, managed by the Ministry of Petroleum and divided between hundreds of plants, entities, and research institutes. In 1965, with consumption much lower than today, China became self-sufficient, and in 1970 it became a net exporter of crude oil.

The formation of State-owned groups

The 1980s marked a turning point in the management of the oil industry, which passed from the ministry to a handful of large industrial groups set up specifically for this purpose and controlled directly by the State Council. Jin Zhang, a researcher at the University of Cambridge, describes how the Chinese oil and petrochemical industry was divided into four sectors until 1997: onshore exploration and production through China National Petroleum Corporation (CNPC); offshore exploration and production through China National Offshore Oil Corporation (CNOOC); refining and petrochemical production through China National Petrochemical Corporation (Sinopec); import and export of oil and chemical products through Sinochem [Zhang, op. cit.]. In addition to these, there was China National Star Petroleum Corporation (CNSPC), which was involved in exploration and production, both onshore and offshore, in specific areas determined by the government.

In the subsequent reorganisation of 1998, an exchange of activities took place, with the transfer of some oil plants to Sinopec and some refineries to CNPC, so as to define the groups on a territorial basis: CNPC was stronger in northern China and Sinopec in the south. Sinopec was and remains China's largest producer of petroleum products, while CNPC continued to be the leader in crude oil production.

Birth of Sinopec

In 1983, the Chinese government approved the separation of refining and petrochemical activities from the Ministry of Petroleum Industry, combining them with activities related to the manufacture of chemical and synthetic fibres, which were under the jurisdiction of the Ministries of Chemical Industry and Textile Industry. This led to the creation of China National Petrochemical Corporation (Sinopec), which brought together 36 major companies, including Shanghai Petrochemical Corporation, Yangzi Petrochemical (Jiangsu), Yanshan Petrochemical (Beijing), Qilu Petrochemical (Shandong), and Zhenhai Refining and Chemical (Zhejiang).

When it was established, Sinopec accounted for more than 90% of the country's refining capacity, which fell to 80% by 1996, mainly due to the growth of CNPC. In the 1990s, some subsidiaries of Sinopec, accounting for a total of 20% of its assets, were converted into joint-stock companies. Fourteen of these were listed on the domestic market and four on the international market, including Shanghai Petrochemical Corporation and Zhenhai Refining and Chemical, founded in 1975 in Ningbo.

During the same period, joint ventures with foreign multinationals began to be established. In 1996, Sinopec had 155 joint ventures, with total foreign investment amounting to $1.3 billion. In addition to these, there were joint ventures between Yangzi and the German company BASF [Lotta Comunista, June 2023] for $2 billion, and between Sichuan Vinylon Plant and British Petroleum for $2.3 billion. Other acquisitions in the 1990s strengthened Sinopec in the field of acrylic fibres, with its market share rising from 30% to 50% over the decade.

A further step towards the independence of petrochemical companies was the establishment of subsidiaries by Sinochem, the only company authorised to import and export chemical and petroleum products, which was controlled by the Ministry of Foreign Affairs and Economic Cooperation. This allowed, at least in part, for these products to be marketed abroad. Chinaoil, a joint venture between Sinochem and CNPC for the marketing of oil, was created in 1993, followed by a similar one between Sinochem and Sinopec for the marketing of refined products.

After the 1998 reorganisation, which led to CNPC and Sinopec becoming vertically integrated along the entire value chain — from drilling to refining — Sinopec reached a production level of 36.3 mt of oil and 2.4 billion cubic meters (bcm) of gas, with an annual refining capacity of over 125 mt. As for CNPC, it now produces 107 mt of oil and 14.8 bcm of gas, with a refining capacity of over 87 mt.

CHINESE PETROCHEMICALS GROUPS
Company (Data in millions of dollars) Country Assets Revenue Employees
Saudi Aramco Saudi Arabia 645,097 480,194 75,118
China National Petroleum China 607,615 412,645 985,155
Exxon Mobil US 453,475 349,585 60,900
Shell UK 387,609 289,029 96,000
Sinopec Group China 375,395 407,490 495,096
TotalEnergies France 285,487 195,610 102,887
BP UK 282,228 194,629 100,500
Chevron US 256,938 202,792 45,298
China National Offshore Oil China 231,744 130,832 85,957
Reliance Industries India 228,260 114,121 381,876
Rosneft Oil Russia 182,191 109,254 333,700
Petrobras Brazil 181,645 91,416 49,185
ENI Italy 152,142 98,641 32,492
Shaanxi Yanchang Petroleum China 69,286 51,062 126,108
Zhejiang Rongsheng Holding China 57,603 91,534 23,653
Zhejiang Hengyi China 18,651 62,792 23,099
Source: Fortune Global 500; data refers to 2024 financial statements.

Sinopec

Sinopec, with $430 billion in revenue in 2025 and 500,000 employees, ranks fifth in the Fortune 500 global ranking. The organisation of such a large industrial group is necessarily complex and multifaceted, including the research, production, transportation, and sale of oil and gas, storage and transportation of refinery products, etc. It has numerous partnerships with major global multinationals. In the article German Roots in Chinese Chemistry [June 2023], we examined some of the collaborations between Sinopec and BASF, but there have been many other partnerships with oil industry giants, starting in the 2000s with Aramco, Exxon, and Total, and continuing in 2023-24 with QatarEnergy and BP. There are many initiatives in the field of new materials. These include the production of carbon fibre ropes with over 48,000 filaments, used mainly in wind turbines, aerospace, and the automotive industry; with a specific weight of a quarter that of steel, they offer up to nine times greater tensile strength.

CNPC

Compared to Sinopec, CNPC's activities are more focused on oil and gas extraction, including related engineering, construction, and services capabilities, as well as the production of equipment for the oil industry. It has numerous operations abroad, starting in 1993 with a contract for an oil field in Peru, which was followed by many others, the most important of which were in Sudan and Kazakhstan. In the 2000s, the group increased its presence in exploration and production in African countries such as Chad, Mauritania, and Equatorial Guinea. Over the last decade, CNPC has entered into partnerships with major Western companies, such as Ineos in 2011 for refining in Scotland and southern France, and ENI in 2013 for the exploitation of natural gas resources in Mozambique. In recent years, major production contracts have been signed with Bangladesh, Turkmenistan, and Brazil. Of particular note is CNPC's presence in Iraq since 2008, when it was the first foreign oil company to sign a contract with the Ministry of Petroleum after the end of the war, leading it three years later to operate two oil fields that reached a production capacity of 27 million barrels per year over the decade. CNPC also cooperates with BP, Exxon, Total, and Petronas to develop other oil fields in Iraq. According to the Middle East Institute, a Saudi and Emirati source in Washington, more than half of Iraq's oil production comes from fields where CNPC and other Chinese companies are operators or partners. In January 2024, CNPC replaced Exxon as the leading producer of oil from a large field with a production capacity of 25 million barrels per year, while CNOOC, present in Iraq since 2010, signed a contract to explore a field in the Iraqi sea.

CNOOC

Founded in 1982, it is the third-largest State-owned company and continues to have marine oil and gas exploration and extraction as its core business. With revenues of $142 billion in 2025 and over 80,000 employees, it is the 56th largest company in the world. In addition to platforms operating in the China Sea, the company is active in marine exploration and extraction in the waters of Brazil, Guyana, Indonesia, and Scotland. It also maintains cooperation agreements with Shell and Petronas.

Sinochem

Sinochem's distant predecessor was China Import, founded in 1950 for foreign trade; according to then-Premier Zhou Enlai, the company's mission was to find opportunities in Western nations, as well as those of Asia and Africa, and seek to import the most sought-after raw materials from those countries. By the end of 1952, China Import had already managed to sign a pact with Ceylon, now Sri Lanka, for the import of rubber in exchange for rice, despite Beijing's de facto Western embargo. Over the years, the company specialised in trading in petroleum, chemicals, and pharmaceuticals. Today, the group employs more than 200,000 people in over 300 subsidiaries across 150 countries worldwide, and had a turnover of $143 billion in 2023.

One of the company's divisions is Syngenta Group, with headquarters in Switzerland and 57,000 employees, which operates in the agri-food sector in more than 100 countries. A significant focus is placed on the development of new materials, such as plastics, silicone, polymers, fluorine, speciality fibres, materials for lithium batteries, and electronics in general. The more traditional petrochemicals business is largely based on production sites located in Fujian and Shandong, while the rubber and tyre sector is currently being redefined, impacted by the ongoing battle within the Pirelli group, of which Sinochem is the majority shareholder.

Translated from the original work by , published in Lotta Comunista, , p. 20.

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