Aug. 28 (Bloomberg) -- Guanghui Energy Ltd., a Shanghai- listed explorer with overseas oil assets, became the first non- state company this year to be allowed to import crude as China’s government opens resource-rich Xinjiang to private investment.
The oil unit of the Urumqi, Xinjiang-based company gained approval to import 200,000 metric tons of crude this year, according to a statement to the Shanghai Stock Exchange yesterday. Xinjiang, with about a quarter of China’s onshore crude reserves and almost 30 percent of its natural gas, may introduce policies to open resources to private and foreign investors, two company officials said earlier this month.
With oil and gas fields in Kazakhstan and no domestic refining assets, Guanghai Energy may be the first private company to sell crude to PetroChina Co.’s refineries in northwest China, according to ICIS-C1 Energy, a commodities researcher in Shanghai.
“For non-state companies to sell crude, the government has to grant quotas,” Amy Sun, an ICIS-C1 analyst, said by phone from Guangzhou today. “This way, Guanghui may sell ESPO crude easily to PetroChina’s refineries in Xinjiang, where there is a local shortage of such feedstock.”
ESPO refers to Russia’s East Siberia-Pacific Ocean crude.
China allocates about 10 percent of its crude-import requirements to 22 non-state traders under a quota system started in 2002, part of a commitment made when it joined the World Trade Organization, according to Bloomberg Intelligence. The traders are able to import as much as 29.1 million tons this year, or about 600,000 barrels a day.
Guanghui’s quota is about 4,000 barrels a day, which is of negligible size in China’s oil market, compared with 5.8 million a day of imports, said Grace Lee, a Hong Kong-based analyst at Bloomberg Intelligence.
Shares of Guanghui Energy rose as much as 10 percent to 8.98 yuan in Shanghai trading. That would be the highest closing price since December 2013.