Sinochem Capitalizes: In a rare move, China’s state oil and chemicals group, Sinochem Corp, has acquired a million barrels of Venezuelan crude oil for delivery in December. This strategic purchase comes in the wake of Washington’s temporary suspension of sanctions on Venezuela’s oil and gas exports for a six-month period. The move has triggered increased spot trades of crude and fuel, with notable participation from Western traders such as Trafigura and Vitol, as well as intermediaries.
Sinochem has secured the cargo of heavy Venezuelan Merey crude at a discount of $11 per barrel to dated Brent crude on a delivered ex-ship (DES) basis. The deal is structured for delivery to Sinochem’s Changyi refinery in Shandong, part of a refining hub where the company operates multiple facilities following a state-mandated merger with ChemChina.
While Sinochem has had limited engagement with Venezuelan oil in the past, this transaction underscores its strategic move to capitalize on the temporary easing of sanctions. The Changyi plant, among several operated by Sinochem in the refining hub, is configured to process heavy types of crude oil.
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The Chinese state-owned company has traditionally steered clear of dealing in sanctioned oil, reflecting concerns about potential adverse impacts on its broader business. The $11 discount negotiated by Sinochem compares favorably with the steeper discounts of $20 for Merey trades during the sanctions era, signaling tightening supplies due to stagnant domestic production in Venezuela and growing demand from India and the United States.
Before the sanctions were eased, Chinese independent refiners were the primary customers for Merey crude, leveraging significant discounts. The move by Sinochem represents a departure from its previous cautious approach and aligns with the changing dynamics in the global oil market. The relaxation of sanctions allows Venezuela to export to any market, and Sinochem’s purchase adds a new dimension to the evolving landscape of oil and commodity trades.
Our Reader’s Queries
Is Syngenta owned by Sinochem?
Syngenta, a Swiss company that competed with Corteva, BASF, and Bayer, was acquired by ChemChina for a whopping $43 billion in 2017. Recently, it was merged with Sinochem Holdings Corp in 2021. It’s worth noting that ChemChina is a state-owned enterprise in China, as Griffin pointed out.
Who owns Sinochem group?
On May 8, 2021, Sinochem Holdings Corporation Ltd. was founded as the holding company for Sinochem Group and ChemChina. This entity is fully owned by the State-owned Assets Supervision and Administration Commission on behalf of the State Council.
Is Sinochem a Fortune 500 company?
Sinochem Holdings has secured the 38th spot on the prestigious Fortune Global 500 List for 2023. This is a remarkable achievement for the company, which has consistently demonstrated its commitment to excellence and innovation. With its unwavering focus on delivering high-quality products and services, Sinochem Holdings has earned a well-deserved reputation as a leader in the industry. This recognition is a testament to the hard work and dedication of the entire team, and it serves as a source of inspiration for future growth and success.
Where is Sinochem headquarters?
Sinochem, a leading company in Beijing’s Xicheng District, specializes in a diverse range of industries including energy, agriculture, chemicals, real estate, and financial services. With a strong focus on these core businesses, Sinochem has established itself as a prominent player in the market. Its headquarters in Xicheng District serves as the hub for its operations, allowing the company to efficiently manage its various business ventures. Sinochem’s commitment to excellence and innovation has made it a trusted name in the industry.