China's Sinopec in major shakeup of overseas unit: sources

[BEIJING] Chinese energy giant, Sinopec Group, is relocating nearly 40 per cent of its staff in its global exploration and production unit back to its headquarters, in a major shakeup aimed at cutting costs and boosting efficiency, company sources said.

China's state oil giants have since last year been trying to focus on ensuring better returns to foreign investments after a wave of expansion in recent years.

The shift in emphasis, which has become more pronounced in recent months, has been partly triggered by Beijing's tough anti-graft campaign and also the slump in oil prices.

China's second-largest energy group, which in late 2013 surprised the market by putting up for sale shale gas assets in Canada, may also look to offload more "non-core" assets, said the senior company sources, without elaborating.

Sinopec International Petroleum Exploration and Production Corporation (SIPC) previously employed just under 700 staff managing dozens of global projects.

Now it will pull 160 staff this year out of overseas posts, on top of 100 transferred last year, the sources said.

The staff will join two new divisions set up in Beijing - the Shared Service Centre and an audit office - to boost technical support and enhance risk management, said one senior official, who declined to be named due to company policy.

Instead of working on a single project, the relocated staff will plan and manage multiple projects.

The reorganisation is due to be completed by the end of 2015, said the source.

Sinopec is also re-assessing its broader investment strategy to identify "core areas" for spending in future.

"We want to zero in on five to seven target zones with identical geology and similar investment climates," said the source, adding that this focus would replace "strategic areas".

The source said that some regions, such as eastern Africa, which is rich in natural gas in deep-sea reservoirs, would fall outside the targets, because to exploit them would require heavy spending and many years to achieve positive cash flow.

Sinopec's press office declined comment.

REUTERS