China has replaced the heads of its three biggest energy companies, the firms said in separate statements, as speculation mounts over reforms to the oil industry. China's Communist Party controls the management of the country's major state-owned enterprises with power to shuffle their heads at will. Industry giant China National Petroleum Corp (CNPC) said in a statement that chairman Zhou Jiping had stepped down due to age, to be replaced by Wang Yilin, previously head of offshore oil firm CNOOC.
CNOOC - which is known internationally for its multi-billion-dollar acquisition of Canada's Nexen - said its president had been promoted to fill Wang's post. Separately, Sinopec said its chairman Fu Chengyu had been replaced by Wang Yupu of the Chinese Academy of Engineering, also because of age. All three announcements came late Monday. Chinese state media have said the government is planning structural reforms to the energy industry this year, with reports saying the changes could include a merger between CNPC and Sinopec. Both companies have twice denied speculation of a merger.
"New leaders would have better opportunities and less of a burden to move the reform forward quickly, that is exactly what the leadership change is about," Gordon Kwan, Hong Kong-based head of regional oil and gas research at Nomura, told Bloomberg News. State media said earlier this month that China is considering merging scores of its biggest state-owned enterprises to create around 40 national champions from the existing 112. But the government agency that manages those enterprises, the State-owned Assets Supervision and Administration Commission, has also denied those reports.
Reform of the energy industry would come as China's three oil majors struggle with lower crude prices. The listed arm of CNPC, PetroChina, recorded an 82 percent year-on-year plunge in net profit for the first quarter, after a 17 percent fall for all of 2014. Net profit of the listed unit of Sinopec slumped 29.7 percent year-on-year in 2014, but CNOOC eked out a 6.6 percent gain last year. In Hong Kong CNOOC closed down 1.06 percent at HK$13.04. PetroChina's Shanghai-listed stock closed down 3.63 percent on Tuesday and Sinopec lost 2.94 percent, after a more than four percent slump in the overall market.
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