By Shuli Ren
China’s three large oil majors all incurred top management changes lately.
The most noticeable is Sinopec‘s (386.HK/SNP) chairman Fu Chengyu, a well-respected executive who headed reform ahead of competitors CNOOC (0883.HK/CEO) and PetroChina(0857.HK/PTR).
There has been a lot of market speculation as to why Fu is retiring now.
To be sure, Fu, 63-year-old, is already at the retirement age. But since this is China (which means retirement age is never firm) and there were rumors of a mega merger between Sinopec and PetroChina’s parent CNPC, investors are asking questions, reported UBS‘s Peter Gastreich and Benson Chen:
Last week, Sinopec’s number 2 Wang Tianpu was arrested for corruption charges. Fu may be forced to retire as a punishment for not running a tight ship.
But the appointment of Wang Yupu to succeed Fu also arouses suspicion that he would just be there – for perhaps a merger integration? At 59-year-old, Wang Yupu is not young either and will be asked to retire in 4 years. In addition, Wang has been with CNPC for 25 years prior to this job.
Meanwhile, CNPC and PetroChina’s new boss Wang Yilin, also 59-year-old, is not young either. Wang Yilin has been CNOOC’s chairman since 2011. Is he now placed at CNPC to oversee a merger?
Interestingly, by comparison, at CNOOC, Wang Yilin will be replaced by a company insider. Vice Chairman Yang Hua is only 54-year-old, so we can see more continuity at CNOOC.
Checking in on prices, China’s oil companies rose as oil price hit this year’s high. China Oilfield(2883.Hong Kong) jumped 4.8%, PetroChina rose 1.4%, Sinopec gained 1.3%, and CNOOC was up 0.2%.