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XFN-ASIA: Shell, PetroChina competing for stake in Beijing Tongyi – report

BEIJING (XFN-ASIA) – Royal Dutch Shell and PetroChina are understood to be bidding for a stake in Beijing Tongyi Petroleum Chemical Co Ltd, the China Securities Journal reported.

The size of the stake was not disclosed.

Beijing Tongyi is the only private firm out of China’s three major domestic lubricant producers, and the report said it is seeking to cut its bill for base oil through a tie up with a major oil supplier.

Base oil is a key raw material of lubricants. Currently Beijing Tongyi has to import 90 pct of its base oil needs, as the local market is largely controlled by by the firm’s two main state-owned rivals — PetroChina and Sinopec.

Officials at Beijing Tongyi declined to comment, the report said.

Beijing Tongyi posted first half sales of 1.5 bln yuan, giving it a 10 pct share of the country’s lubricant market, the report said.

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