International oil giants enter the Zibo retail market layout to accelerate competition

Following CNOOC's landing in Zibo in 2009, on the 19th of this month, the international oil giant Shell Oil officially announced its entry into the country. This also means that the Zibo refined oil market, accustomed to Sinopec, PetroChina, and private gas stations, has ushered in new arrivals.

International oil giant enters Zibo

On the 19th, the international oil giant Shell Oil announced its entry into the Zibo market.

"Planning for a long time" seems to be the best description of Shell's entry into the retail market in Zibo. A person familiar with the situation inside Zibo oil products revealed that as early as last year, Shell had come to visit, with a number of private gas stations to start negotiations, and given the conditions are considerable. However, the results of the above-mentioned negotiation work were finally reflected in the third week of August. At this time, a private gas station at 63 Changguo West Road, Zhangdian was replaced by Shell, a foreign gas station.

In fact, the entry of Shell into Zibo is based on its planned layout of the Shandong refined oil retail network.

The above layout was started around August last year. At that time, Shell Petroleum Corporation and Shandong Province launched a cooperation to establish Shandong Shell Petroleum Co., Ltd., and plans to invest 0.15 billion yuan to acquire, lease, build, hold, and share equity. The establishment of 200 gas stations in Shandong in the form of contracting and the construction of a refined oil retail network in Shandong. According to the information available at the time, Shell will establish a regional headquarters in Jinan as a regional investment center, operation center, and talent training center for Shell Petroleum in Shandong.

One year later, the above layout was also revealed in Zibo. In response to this, Zhuo Chuangxin, a refined oil analyst, said that Shell's presence in Zibo is intended to capture the highlands in Shandong and further consolidate its position in Shandong and even the northern oil product retail market.

Foreign investment is not the first example

Foreign gas stations entered the Zibo market, Shell is not the first.

Prior to this, South Korea's SK Group had entered Zibo through cooperation, mergers and acquisitions, new construction, and other methods, and set a new foothold.

In the Shandong market, since China announced the liberalization of the refined oil retail market in December 2004, the pace of foreign gas stations has continued. In addition to SK, South Korea’s LG Group, Shuobu Oil Co., Ltd., and Jiajiatex (Qingdao) Energy Co., Ltd., etc. have entered the Shandong refined oil market successively through mergers and acquisitions and new construction. In addition, the above-mentioned foreign-funded enterprises have set up several gas stations in Qingdao, Yantai and Jinan.

Today, Shell, which has settled in Zibo, is an abbreviation of Royal Dutch Shell Group, an Anglo-Dutch (United Kingdom, Netherlands-affiliated), and is the world's leading producer of oil, gas and petrochemical products.

Relevant data show that Shell's business has spread to more than 130 countries in the world and has interests in more than 50 refining enterprises in more than 30 countries, and it is also a petrochemical, road transport fuel, lubricant, aviation fuel and liquefied petroleum gas. Major distributors, there are currently about 50,000 gas stations all over the world.

"Country" oil companies attacking cities slightly

While accelerating the layout of Zibo, foreign capital has already been playing a "national name" for the world in this market, and is unwilling to be lonely.

Sinopec and PetroChina are even more "strong" players, and have accumulated fruitful results in their gas stations.

Taking Sinopec as an example, the reporter learned from the market that since last year alone, there have been no fewer than 10 newly-registered Zibo gas stations. “The most concentrated area is in Taiwan.” said the Zibo refined oil source.

In a recent case, in May of this year, Zibo Branch of Sinopec officially took Meiji Petroleum Haihong Station in Zhangdian Shanquan Road to its headquarters. The history of Haihong Station, both scale and history, plays an important role in the development of Zibo’s private gas stations.

At the same time, another oil giant, CNPC, is also frequently using the retail market in Zibo. “We have been working hard to expand the retail map,” said PetroChina’s staff, who declined to be named.

It has been revealed that through continuous years of "climbing cities," PetroChina currently has more than 60 gas stations on the Zibo market.

In addition, CNOOC, which is at a disadvantage in terms of quantity and market share, has also accelerated its pace of expansion. "We have been negotiating, Binzhou, etc. around Zibo are all in the deployment." CNOOC's retail business commissioned agent - Shandong Datang Oil & Gas Co., Ltd. said earlier.

Private oil companies are bleak

Behind the gradual emergence of the monopoly of the oil giant's expansion, is the gradual gloomy starlight of private oil companies.

“Private oil companies are being crushed by the giants' expansion of iron hoops,” said Zibo, a private gas station official.

It is worth noting that compared with the previous "big stick" type of pressure, the current collection has become a naked "gold and gold offensive." As a result, a large number of privately-owned gas stations changed their ranks.

“Compared to the overall acquisition, we are not willing to use negotiations to solve the operating problems of private gas stations through shareholding.” This is the voice of oil giants.

Today, whether the management problems of other private stations in the Zibo market are “solved” remains doubtful. However, just as the aforementioned Zhuo Chuang Information Oil Product Analyst stated, what we know is that the oil giants such as Shell, Sinopec, and PetroChina have all entered the market and are intensifying competition in the Shandong refined oil retail market.

Here, we believe for the time being that the above competition will give consumers a big advantage.