China National Offshore Oil Corp. (CNOOC), the country's leading offshore oil producer, would be a new competitor in China's domestic oil product market as the company gained qualification for oil product wholesales, experts said on Friday.

China's commerce ministry said Thursday that CNOOC had obtained a license for oil product wholesale from the ministry, which allows the company to sell its oil products to oil companies besides retail customers.

The approval is a great step for CNOOC, as the company had been trying to expand its business in the oil product market through its 12-million-ton Huizhou refinery in Fujian province and through acquiring private refineries.

The admittance would make China's oil product market more competitive, which had been dominated by PetroChina and Sinopec, China's largest oil and gas producer and largest oil refiner respectively, said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

Currently, 2760 companies have been given such wholesale licenses. Three-quarters of them belong to Sinopec and PetroChina. Some private enterprises have also been given the nod.

CNOOC's 12-million-ton Huizhou refinery, which started operation in June, would annually provide about 7 million tons of petrol, kerosene and diesel and 4 million tons of other petrochemical products to southern and eastern China through wholesaling, said Zhao Yan, a deputy general manager with CNOOC's Huizhou project.

However, as CNOOC is still weak in its retail business, the impact on market would be limited in the short term, Lin added.

The dominance of PetroChina and Sinope would not be broken until CNOOC expand its market shares, said Dong Xiucheng, professor with China University of Petroleum.

CNOOC owns 187 gas stations all over China by the end of 2008, while Sinopec has over 29,000 and PetroChina has over 19,000 stations.

Source: Xinhua