Leadership reshuffle set for oil giants

Top-level changes in management may be impetus for structural reforms, say analysts

A leadership shuffle at the nation's oil companies will open up more possibilities of reform, both in terms of individual corporate structures and overall industry operations, analysts said.

The Organization Department of the Central Committee of the Communist Party of China on Monday announced new top executives of China National Petroleum Corp, China Petrochemical Corp (known as Sinopec) and China National Offshore Oil Corp, a move that is expected to promote the market-driven reform of the energy industry.

Fu Chengyu, 64, an aggressive reformer and innovator in the domestic oil industry, retired as chairman of Sinopec, Asia's biggest refiner.

He was replaced by Wang Yupu, 59, deputy head of the Chinese Academy of Engineering.

During a meeting to review the company's interim results in August, Fu told shareholders that the central government had decided to let him stay in his post indefinitely.

Therefore, his retirement now comes as a surprise to industry insiders who had expected that he would lead the company for several more years.

"Bringing in a new head with an academic background will benefit Sinopec's upstream exploration sector in research and development," said Li Li, research director at ICIS Energy, a Shanghai-based energy information consultancy.

"Fu had an open mind in terms of State-owned enterprise reform when it came to introducing private investors into the oil business", she said. "Whether Wang follows Fu's strategy will have a big impact on Sinopec's development."

Wang Yilin, former chairman of CNOOC, became a man with a "big burden". He has been named chairman of CNPC, replacing Zhou Jiping, who retired at the age of 63.

CNPC's upstream business has taken a hit from falling oil prices, with first-quarter profit down more than 80 percent year-on-year.

Li also noted that CNPC had not made any "solid progress" in the mixed-ownership reform drive encouraged by the central government.

"Compared with Sinopec, CNPC is lagging, with no clear direction for its reform," she said.

Yang Hua, who was chairman of CNOOC, will be the chairman of CNOOC after Wang Yilin leaves for CNPC.

"Of course, there might be some personality issues when it comes to the management style, but CNOOC's international strategy will continue to be its biggest advantage among the three giants," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

dujuan@chinadaily.com.cn