--- title: "China’s oil giants Sinopec, CNAF to undergo consolidation, creating energy powerhouse" type: "News" locale: "en" url: "https://longbridge.com/en/news/271941926.md" description: "China's largest oil refiner, Sinopec, and leading jet fuel distributor, CNAF, are set to undergo an asset restructuring approved by the State Council. This move aims to enhance operational efficiency and financial strength among state-owned enterprises. The merger is expected to create a vertically integrated oil powerhouse, especially as China seeks to streamline its industrial capabilities. The consolidation comes amid concerns over crude supply from Venezuela, with the Chinese government pushing for reduced overcapacity in key industries. This restructuring aligns with broader efforts to improve the quality of state assets and boost long-term development." datetime: "2026-01-08T13:35:37.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/271941926.md) - [en](https://longbridge.com/en/news/271941926.md) - [zh-HK](https://longbridge.com/zh-HK/news/271941926.md) --- # China’s oil giants Sinopec, CNAF to undergo consolidation, creating energy powerhouse Beijing has given the green light to an asset-restructuring deal involving the country’s largest oil refiner and a leading distributor of jet fuel, continuing efforts to streamline operations of major state-owned juggernauts.\\nChina Petroleum and Chemical Corp, better known as Sinopec, and China National Aviation Fuel Group (CNAF) will conduct a revamp of their assets after receiving the nod from the State Council, the State-owned Assets Supervision and Administration Commission (SASAC) said in a statement on Thursday.\\nIt did not provide details about the reorganisation between the two companies. In mainland China, asset restructuring between two state-owned giants is synonymous with a merger.\\n“The state-asset regulator is looking to orchestrate more consolidation deals to strengthen the financial muscle and operating efficiency of big companies in some important industries,” said Wang Feng, chairman of Ye Lang Capital, a Shang­hai-based financial services group. “A merger between the two firms will create a more vertically integrated oil empire.”\\n\\nSinopec processes crude into oil products, including jet fuel – supplying it to CNAF, which controls the refuelling network at mainland China’s airports.\\nAccording to a Bloomberg report in November, Sinopec was in talks to take over the jet fuel distributor as travel demand rebounded from the Covid-19 pandemic. China consumed more than 40 million tonnes of jet fuel a year, or about 1 million barrels a day, the report added.\\nSASAC’s announcement comes amid rising worries about China’s crude supply from Venezuela. China is the world’s largest buyer of crude from the South American country.\\nThe US was demanding oil-rich Venezuela reduce its economic ties with China after the capture of the country’s former president Nicolas Maduro and his wife last week, ABC News reported.\\nThe couple was grabbed from the presidential compound in Caracas by US special forces and whisked to New York to face drug and weapons charges.\\nThe Chinese government has been urging state-owned industrial behemoths to reduce overcapacity and excess stockpiles over the past five years to enhance the country’s manufacturing capability and improve the quality of state assets.\\nHeavy industries such as coal, steelmaking and power generation are the key areas that the top policymakers aim to overhaul.\\nThe number of central government-controlled companies under SASAC currently stands at 100, down from 170 in 2009.\\nThe integration effort aimed to boost the long-term development of state-owned enterprises through mergers, eliminating redundant capacity and boosting overall efficiency, SASAC said in November.\\nIn 2024, China’s state-owned shipbuilding juggernaut CSSC Holdings announced a plan to take over China Shipbuilding Industry Company. The merger would create an entity with annual sales of more than 120 billion yuan (US$17.15 billion), nearly double that of South Korea’s Hyundai Heavy Industries.\\nCSSC, now the world’s largest shipbuilding conglomerate, controls one-third of the global market.\\nIn December, Lin Qingshan, vice-president of Jiangnan Shipyard (Group), a subsidiary of CSSC, told the Post that the company planned to build the world’s first nuclear-powered container vessel, a move that would cement China’s dominance in an industry increasingly shifting to renewable energy.\\nConstruction could start in 10 years’ time, he added.\\n ### Related Stocks - [00386.HK](https://longbridge.com/en/quote/00386.HK.md) - [600028.CN](https://longbridge.com/en/quote/600028.CN.md) ## Related News & Research - [Here's the defensive stock-market trade that -2-](https://longbridge.com/en/news/287637816.md) - [Assessing China Petroleum & Chemical (SEHK:386) Valuation After Recent Share Price Weakness](https://longbridge.com/en/news/287455264.md) - [Coal forge fire tips and advice](https://longbridge.com/en/news/287186235.md) - [Oil market is ‘selling a lie’ to the public, oil execs warn](https://longbridge.com/en/news/287276562.md) - [Study warns fossil fuel phase-out by 2050 needs 80% more power](https://longbridge.com/en/news/287262181.md)