16 independent refineries establish Shandong Refining & Chemical Group

　　After nearly a month of preparation, Shandong Refining & Chemical Energy Group was officially established in Jinan, with a proposed registered capital of 90 billion yuan. The group is led by Dongming Petrochemical and jointly funded by a total of 16 independent refining enterprises.

　　Industry insiders believe that in recent years, competition in the refining and chemical sector has intensified, with large-scale refining and chemical projects being launched one after another. Against this backdrop, local refineries have banded together to form a refining and chemical group, aiming to strengthen their bargaining power. With the establishment of Shandong Refining & Chemical Group, the emergence of a "fifth oil player" is now within reach.

　　Local refining enterprises joining forces will enhance their bargaining power.

　　The reporter from the Securities Daily learned that on September 27, Zhang Liucheng, Chairman of the China (Independent Refinery) Petroleum Procurement Alliance and Vice President of Dongming Petrochemical Group, announced during the APPEC conference in Singapore that Shandong Refining & Chemical Energy Group Co., Ltd. (hereafter referred to as "Shandong Refining & Chemical Group"), with a proposed registered capital of 90 billion yuan, will soon be officially listed. On the same day, Shandong Refining & Chemical Group was formally registered and established in Jinan.

　　The purpose of local refining enterprises joining forces is to foster deeper cooperation among regional refineries, optimize and integrate their operations—including raw material procurement, logistics distribution, financial flows, and product optimization—while achieving coordinated management of capital and logistics. This collaboration aims to enhance the core competitiveness and influence of the refining and chemical industry.

　　It is understood that the first batch of companies participating in the group includes 8 enterprises, which have collectively invested an initial 33.19 billion yuan. Dongming Petrochemical holds the largest stake at 22.63%, while the second-largest shareholder is Blue Economic Zone (Qingdao) Industry Investment Fund Management Co., Ltd., with a 22.59% holding.

　　Additionally, there are six other shareholders: Shandong Tianhong Chemical Co., Ltd. holds a 13.29% stake; Shandong Qingyuan Group Co., Ltd. owns 12.20%; Shandong Shouguang Luqing Petrochemical Co., Ltd. holds 7.8%; Jiangsu Xinhai Petrochemical Co., Ltd. has a 7.56% share; Wudi Xinyue Refining & Chemical Co., Ltd. owns 7.26%; and Shandong Shengxing Chemical Co., Ltd. holds 6.66%.

　　The project will be jointly funded by 16 companies, including Dongming Petrochemical, Jiangsu Xinhai, HSBC, Tianhong, Yatong, Shouguang Luqing, Qirun, Haiyou, Qingyuan, Hengyuan, Hebei Xinyue, Jincheng, Shenchi, Zhonghai Chemical, Rizhao Lanqiao, and Hebei Fengli.

　　It's worth noting that the Shandong Provincial Government will also inject 7.5 billion RMB into the group via a fund, and in the future, it will participate in financial and industrial management but will not be involved in day-to-day operations. This move to some extent reflects the Shandong provincial government's recognition of and financial support for the establishment of Shandong Refining & Chemical Group.

　　It is understood that after the group is established, it will adhere to the principles of "three constants" and "five unifications." The so-called "three constants" refer to the unchanged management team, the unchanged tax payment channels, and the continued independent operational system—where each company remains financially responsible for its own profits and losses—thus preserving the autonomy of each shareholder company.

　　"The 'Five Unifications' refer to unified planning, where enterprises rationally determine their development directions and downstream product strategies based on their inherent strengths and market demands; unified raw material procurement, leveraging the Petroleum Procurement Alliance as a platform to centralize the purchase of bulk commodities like oil; unified loan management and settlement processes; unified transportation, encompassing overseas crude oil shipments as well as coordinated resource management for pipeline transport and storage within the province; unified sales and export of refined petroleum products; and finally, unified management of retail outlets to boost the proportion of refined oil sold directly to consumers at refineries."

　　Zhao Guizhen, an analyst at Longzhong Petrochemical Network, told a reporter from the Securities Daily that it is crucial to align the interests of all enterprises, shift away from the current loose cooperative model in oil procurement and refined oil sales, and establish a closer, capital-driven partnership instead. After the group is fully formed, its internal management structure will be specifically divided into four key areas: production management, procurement management, sales management, and industry management.

　　Specifically, from a production management perspective, Shandong Refining & Chemical Group primarily focuses on trading crude oil and refined oil products, while simultaneously building supporting logistics facilities such as storage warehouses, pipelines, and terminals. Each shareholder unit is responsible for organizing the production and operation of products other than refined oil.

　　In terms of sales management, while securing general export qualifications, we will strive to tap into overseas markets; by establishing an e-commerce platform model and implementing unified regional pricing, we aim to capture the domestic market; and we will also advance the construction of refined oil retail networks for local refining and chemical enterprises.

　　Industry insiders believe that Shandong Refining & Chemical Group's aforementioned approach is all about forming strong alliances in a fiercely competitive environment, aiming to secure a larger share of the market.

　　"The Fifth Oil" is on the verge of emergence.

　　On September 1 this year, the Shandong Provincial Commission of Economy and Information Technology issued the "Reply on Accelerating the Transformation and Development of Provincial Independent Refining Enterprises and Establishing Shandong Refining & Chemical Energy Group Co., Ltd.," emphasizing that Shandong Refining & Chemical should focus on enhancing industry concentration and overall competitiveness, while better leveraging both international and domestic markets and resources—laying a solid foundation for further industry consolidation, restructuring, and group-based development.

　　Although Shandong Refining & Chemical Group took less than a month from approval to establishment, it still lagged one step behind Zhejiang Province.

　　On September 16, Zhejiang Province took the lead in establishing the Zhejiang Petroleum Group, which boasts a registered capital of up to 11 billion yuan. Zhejiang Energy Group holds a 60% stake, while the remaining 40% is owned by Zhejiang Petrochemical Co., Ltd.—a company jointly funded by Rongsheng Petrochemical, Juhua Group, and other major players. The latter is currently investing in the construction of a 40-million-ton-per-year integrated refining and petrochemical project in Zhoushan, Zhejiang Province.

　　With the aim of building and extending Zhejiang's petrochemical industry chain, as well as accelerating the development of the Zhoushan Free Trade Zone, the Zhejiang Provincial Government has actively promoted the rapid establishment of Zhejiang Petroleum Group. From shareholder negotiations to company design planning and even registration, the entire process took just two months.

　　It is understood that Zhejiang Provincial Petroleum Group formulated a relatively clear development plan right from its inception: in the first phase, it plans to establish hundreds of gas stations (integrated energy supply stations) around 2020, with an anticipated investment of 70 billion yuan. Additionally, the group aims to build a refined oil sales division and create a comprehensive oil storage, transportation, and distribution system.

　　Zhao Guizhen believes that although Zhejiang Petroleum Group has already begun operations ahead of schedule, Shandong Refining & Chemicalization is determined not to be outdone. By seizing opportunities at the right moment, deepening cooperation, and adopting an integrated upstream-to-downstream industrial development model, the company can achieve centralized procurement of raw material resources and establish a sophisticated pricing mechanism for refined oil products. Additionally, it aims to enhance petrochemical warehousing capabilities and accelerate the construction of its "four vertical and five horizontal" oil and gas pipeline network, further extending the deep-processing industry chain to unlock higher value-added opportunities in petrochemical products—and ultimately strive toward becoming a world-class, ultra-large-scale petrochemical energy group with significant international influence.

　　She also pointed out that although Zhejiang Provincial Petroleum Group took the lead in establishing itself, the approach of optimizing its portfolio was indeed the right one—Shandong Province must now catch up swiftly. Against the backdrop of falling international crude oil prices and an oversupply of refined oil products domestically, breaking the monopoly in the domestic refined oil industry has become not only essential but also urgently needed.

　　It is well known that China's refining and chemical market has been dominated primarily by the "Big Four" state-owned oil companies, while independent refineries have historically remained relatively fragmented and operated largely on their own. However, the establishment of Zhejiang Petroleum Group clearly signals that competition in the refining and chemical industry is intensifying, making collaborative efforts—such as forming alliances to strengthen collective resilience—a growing trend.

　　Industry expert Li Hong told a reporter from the Securities Daily that Shandong Refining & Chemical Group aims to continuously enhance its influence and establish itself as "China's fifth major oil player."