January 3, 2011 [Zacks] - China-based integrated oil firm PetroChina Company announced the sale of its wholly owned subsidiary PetroChina Guangxi Oil Storage Limited to the parent company China National Petroleum Corporation (“CNPC”). PetroChina will receive a total consideration of 2.11 billion yuan or $319.7 million in cash.
Per the terms of the agreement, PetroChina will transfer 100% equity of the Guangxi unit for the consideration, which is based on the net asset value of the transferred company.
Apart from oil storage, the Qinzhou city unit is also involved in pipeline transmission. The division currently has a storage capacity of 4,000,000 cubic meters of oil.
The sale is in line with PetroChina’s restructuring strategies intended to redesign the asset portfolio of the company, increase the fund utilization rate and maximize returns, thereby leading to higher profitability. The company aims to utilize the cash received to repay bank loans and enhance its international oil product business.
