Two state-owned enterprises join forces, Yanchang Petroleum

On June 25, Shaanxi Natural Gas Co., Ltd. announced that, according to the requirements of the State-owned Assets Supervision and Administration Commission of Shaanxi Province, the largest shareholder of the company's controlling shareholder, Shaanxi Gas Group (hereinafter referred to as "Shaanxi Gas"), plans to change to Shaanxi Yanchang Petroleum (Group) Co., Ltd. Liability Company (hereinafter referred to as "Yanchang Petroleum"). It is reported that Yanchang Petroleum, as a strategic investor, has increased capital and shares in Shaanxi Gas. After the capital increase and share expansion, the shareholding of Yanchang Petroleum may exceed 51%.

Shaanxi Gas and Yanchang Petroleum are both large-scale energy companies under the State-owned Assets Supervision and Administration Commission of Shaanxi Province, and the combination of the two may rationalize the natural gas market structure in Shaanxi. At the same time, Yanchang Petroleum will become another domestic energy giant after PetroChina that has opened up the entire natural gas industry chain, which will facilitate the early realization of the goal of "gasification of Shaanxi".

By the end of 2018, the annual gas production of Yanchang Oil & Gas Exploration Company reached about 3.3 billion cubic meters. It is expected that in 2019, the gas production will be close to 5 billion cubic meters. The acquisition of Shaanxi Gas by Yanchang Petroleum means that it has pipelines and even expanded downstream sales, which will clear the "obstacle" for Yanchang Petroleum to vigorously develop the natural gas industry. In the future, the annual output of Yanchang Petroleum and natural gas will exceed 10 billion cubic meters is not out of reach.