China: Merger of China’s Iranian oil trader approved

China’s cabinet has approved the merger of state oil trader Zhuhai Zhenrong Corp and Macau-based conglomerate Nam Kwong Group, as part of a plan to consolidate state-owned enterprises to boost competitiveness.

The merger could boost the financial standing of Zhuhai Zhenrong, a former defence-sector affiliate that was created in the mid 1990s to deal in Iranian oil, oil industry officials said.

The State-owned Assets Supervision and Administration Commission noted the approval in a one-line statement on its website (www.sasac.gov.cn). A Zhuhai Zhenrong spokeswoman said details of the restructuring and a date for completion had not been finalised.

“The merger may at least help win Zhenrong larger bank financing for oil trading,” said one senior trader familiar with Zhenrong.

State-controlled Nam Kwong Group is involved in real estate, logistics and travel as well as small-scale natural gas and petrochemicals businesses, according to the company website.

Zhuhai Zhenrong imports about 240,000 barrels per day of Iranian crude oil, equal to about 4 percent of China’s total crude oil imports, under annual supply contracts with Tehran.

Full content: Tasnim News

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