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With oil prices plummeted, the country's fourth-largest oil company to extend the oil's main business slump. And account for nearly 15% of its revenue chemical sector has come to a downward inflection point, a tough self-help is to expand its interior.

In early May, an important destination for the new chairman of Yanchang Petroleum Group is Shaanxi He long long deckle. Here is one of the four major energy and chemical base in Shaanxi, also extended an important production base petrochemical sector.

Contribute nearly 30% of Shaanxi Yanchang Petroleum tax, Shaanxi chemical industry has been playing a "savior" role. However, as oil prices plummeted, as the "fourth barrels of oil," the extension of the oil in 2015, the performance was obliterate everyone.

Shaanxi local superior natural resources, energy and chemical sector has become so unique extension of the oil business. However, with hot and cold changes in the market, the former fame of the chemical industry reached an inflection point.

To appease investors in its listed companies, while saving tens of thousands of people in northern Shaanxi employment, extension of the oil inside is also engaged in a series of difficult restructuring. He is the new chairman for a long time, obviously not to let this relates to the employment of thousands of people in Shaanxi star industry this fall, but how to save themselves, it is a key challenge for his term of office.

▼Stalled project

Deckle, Shaanxi, Ningxia is located at the junction of a small town, who had Shensi revolutionary base as is known. Here is rich in coal, Glauber's salt and other chemical raw materials. As it is located in the coal-rich region chemical industry, and thus become refined oil, coal consumption of high demand, high-yield areas.

Yanchang Petroleum energy and chemical industry base is located here, as early as 10 years ago, it became the extension of the oil 1.8 million tons of methanol, 1.5 million tons of production base residue cracker project. In 2010, Yanchang Petroleum Group decided to invest more than 150 billion yuan, and then a group of chemical projects located in Jingbian (adjacent to the given side) energy and chemical industrial park. These projects contain magnesium oxide, magnesium chloride, sodium chlorate salt chemical-based products, as well as Glauber's salt, sodium sulfate, sodium sulfide nitrate-based chemical products. If all do so, these projects annual sales income of 15 billion yuan to 180 billion yuan, 1.5 billion yuan turned over taxes.

In the extension of the oil development path, the oil is the slogan of both long-standing, the chemical industry is the main business outside of its oil sector, another large-scale industry. Shaanxi Province SASAC even want to extend the oil-based, to create star enterprises, and Shaanxi province to fight the chemical industry.

However, policy makers never thought that this series of dreams with the ups and downs of chemical market and almost burst.

2015, Yanchang Petroleum publicly earnings due to falling oil prices, extended oil revenue fell 4.579 billion yuan, while mining costs are increased by 4.059 billion yuan, a reversal of a positive result in the first three quarters from a year earlier profit of 6.335 billion yuan to a loss 535 million yuan, while net profit attributable to owners of the parent company, a loss of 2.956 billion yuan.

Matched by the dismal performance of the chemical sector. Currently, the extension of the oil and chemical sector there are two listed companies, one is originated in Xingping fertilizer plant, organic fertilizer, ammonium nitrate-based explosive materials industry companies Xinghua shares, another is based on energy and chemical engineering construction the extension of the main construction. But according to the two listed companies disclosed data, in 2014, due to the extreme excess ammonium nitrate fields, Xinghua Group 2014 loss of 150 million yuan, the second half of 2015, suspended restructuring; In addition, the construction of oil-based chemical projects extended Huajian, shrinking workload, 2015 revenue 3.8 billion yuan, 26.52% decrease over 2014.
 

After the Annual Report, panic spread in the whole group, and ultimately spread to the northern Shaanxi. Since some projects capital chain rupture suddenly, originally scheduled for 2014 fixed the border between salt chemical projects put into operation so far has yet to start. Its plant put into use less than two years, and now the figure has little to workers, some of the plant equipment has been buried in the dust of them, the scene is very bleak.

When profits almost halved, the market has been criticized to conceal, to pacify its investors resorted to repeated extension of the oil broken wrist move - sliced executive compensation, general staff canceled bonuses. Among them, Xinghua Group in mid-2015 began a six-month restructuring, and salt chemical industry in Northern Shaanxi also forced to stop production in order to reduce expenditure.

Such pain may only extend the oil insiders know. Was added in 2010 to extend the oil's Joe Smith (a pseudonym), due to technical skill, promoted by the leadership, thirties has become total project technical director, with the prospect admired. But from 2015 onwards, due to the project on hold, John's salary was cut, life unsustainable.

John's case only extend deckle chemical park portrayal of an ordinary employee in the past few years, these energy Chemical Industry Park is looking forward to after graduation many local chemical Majors, and many people in the local settled, some people just become a father , them saddled with huge mortgages. The suspension of the project, so how to survive became placed in front of these employees first test.

Continue to delay the construction period, but also a drag on the basis of chemical energy to survive, large and small private suppliers. An unnamed supplier told the "energy" Reporter: "From 2014 onwards, will be extended after another received several subpoenas, many businesses the equipment installed, and suddenly no one delivery, some project extension the money to pay, and suddenly no one is picking up, presumably late delivery one day, there will be 3% of the fines, but now one year later, nobody has. What are, uncertain prospects for the project, Yanchang petroleum also in no mood to control them. "

▼Controversial expansion

In most people's eyes, to extend the development of the plight of chemical projects from previous years of blind expansion. As early as 10 years ago, Shaanxi Province, into the Great Leap Forward period of the exploitation of resources, since salt chemical, coal chemical raw materials Enrichment just in Shaanxi, Ningxia, Inner Mongolia provinces at the junction, to become provinces coveted land, competition for resources is around fierce. The Inner Mongolia resources development tendency of local businesses, more competition for resources concentrated in Shaanxi and Ningxia.

Recalling the history, a chemical industry expert message: "Shaanxi, Inner Mongolia, Ningxia provinces, who caught these areas, it was decided that it developed in the next 30 years."

During this period, Shaanxi Province Chemical Industry industrial scale rapid growth. Shaanxi Provincial Department of Industry data show that: "During the second five, the chemical industry average annual growth of 26.3% in 2015, the chemical industry accounted for the province's industrial output value of 120 billion yuan, in particular in the field of coal to olefins topped the country rankings, has a total of 4 large-scale coal-to-olefins project, total capacity of 3.1 million tons. "

However, as a pipe enterprise in Shaanxi Province, to extend the investment system has its ceiling, all making mistakes inevitably biased towards Reviewed by managers. "Yanchang Petroleum is central to the establishment of the nature of old revolutionary base areas of care, in order to promote local economic oil. In a bad economic situation, the task of saving the economy of Shaanxi Yanchang Petroleum naturally fall on him. At that time, Shaanxi Province hopes to become energy and chemical province, but the local chemical industry too scattered, so a company can hope Shaanxi local chemical industry together, to create a large chemical industry. for example, the extension of the oil leading the 2008 acquisition of ammonium nitrate Xinghua Group boss. "an oil industry practitioners told "energy" reporter.

For Xinghua Group, this acquisition is undoubtedly exciting, on the one hand, the local state-owned enterprises from the world marked the 500 mark. But more crucially, to extend the oil in Xinghua Group transfusion type of acquisition, but also saved the verge of bankruptcy, the debt ratio is extremely high Xinghua Group. Shaanxi provincial government as a platform by means of Xinghua shares of capital operation, strategic plan to accelerate the extension of oil development, making Xinghua shares which ultimately makes the A-share market.

Until now, the acquisition of Xinghua Group also caused some controversy extended oil inside. Zhuo record information an analyst said, as early as 2002, it is already a surplus of ammonium nitrate products, Xinghua Group loss after 2006 years ago, in 2008, has been insolvent, workers can not afford to send wages. Yanchang Petroleum Group after the acquisition of Xinghua, a brief improvement in the situation, but in 2013 and 2015, the situation worsened, and three-year loss of nearly 1 billion.

"Since it is the extension of the parent, you want the hole Xinghua shares profit dividends, it must take it after the early loss of the fill is likely to shareholders dividends, capital losses from extended funding to pay for the SAC is also there is another consideration, job placement more than anything else matters. "a source close to Xinghua Group insiders said.

Of course, oil prices stable period, this decision does save some loss industry, indirectly played a role in protection of employment. However, along with hot and cold change in the oil industry, to extend ushered in the history of the worst results of the year. Main business slump, a series of upstream and downstream consequences spread, affecting the chemical sector, a sharp decline in the main turnover.

"Eat or drink do not work, raising the monthly extension of the oil workers is spending hundreds of millions. Living had still dry, but now can not expect transfusion parent, they can only rely on self-help." A reluctant Insiders named, said.

▼Chemicals segment for self-help

In early May, Fourteenth North Shaanxi Energy Chemical Base Construction of high-end forum was held in Yan'an City, the company chairman Ho long long meeting. Despite the low-key meeting place was a deliberate arrangement, but as the new chairman soon He is still a long long look with anxiety unavoidable under the eyes. How to lead the team to break through and become the primary problem and challenge since he took office facing.

Shen Hao, former chairman and timing differences. During the inaugural Shen Hao, chemical industry, triumph, living in high oil prices. However, the replacement of old, in the turmoil of personnel changes under internal and external form of the chemical industry is also quietly changing.

Released under the recently released report of the Shaanxi Provincial Bureau of Statistics, in 2016, a sharp decline in Shaanxi quarter industrial health, industrial loss-making enterprises 1415, down 1.4%, a loss of 26.4%. Enterprises suffered losses totaling 8.48 billion yuan, an increase of 0.4%, wherein the chemical raw materials and chemical products industry losses of 670 million yuan. Among them, the loss of billions of dollars in ten companies, PetroChina Changqing Oilfield topped and, secondly, to extend the oil (Group) Co., Ltd., Yanchang Oilfield AG.

Extension of the oil market at the time when the acquisition of the chemical industry and is now very different, so in excess of the chemical under current market, how to save the local economy, focused on the development of advantageous resources is imperative. In addition, this is because international oil prices since 2014, rapid "diving" since the coal chemical industry, petrochemical industry due to reduced investment enthusiasm giant.

For Shaanxi chemical industry, which is inseparable from the extension of the oil figure. As for the extension of the oil, the downturn in oil prices devastated the main industry, but also need to rely on the chemical industry breakthrough. Self-help is expedient.

Because ammonium nitrate prices fell more than 40%, to save the results of the rapid deterioration of the dilemma, Xinghua Group, through the replacement of assets in the form of its release, and its parent company shareholders by the extension of the oil on behalf of the holders. After the reorganization of Xinghua Group Co., will be the main LNG business, becoming extend natural gas sales company. "Near Yanchang Petroleum, an industry source told the" energy "reporter.

Order to extend the oil is quite proud of the fact that some chemicals have considerable scientific and technological content still is retained. "For example, liquid hydrogen rocket fuel production technology. These high-end products are still walking in the domestic front." Shaanxi Chemical Design Institute, an expert told the "energy" reporter.

But the demand for liquid hydrogen is extremely limited and can not meet the huge demand for chemical sector in transition, therefore, another measure is to streamline the chemical industry.

With the increasing competition, we continue to lower the threshold for the chemical industry, to extend the distribution of oil resources in the field of chemical industry will be adjusted at the same time looking for new growth points and partners. For example, are generally optimistic about the extension of the internal PPS is considered one of the most important decisions will pull it out of the swamp operations.

A chemical industry practitioners said. "Yanchang Petroleum energy and chemical industry, though started late, but if based on Shaanxi local natural resource endowments, the industrial chain has been quite complete, bigger and stronger chemical industry is also very possible. Chemical industry compared to the energy business more open, relatively the oil industry, the transition is easier, but not as crazy as before expansion, and now there should be more selective development of some of the scientific and technological strength of the product. "

Extend the Chemical Design Institute, an expert said: "As long as there is a private advanced technology, to extend the oil can now work with them to extend the oil through a difficult period, the introduction of technology should be a good opportunity, but also pay attention to strategies to minimize. costs. this extension of the oil, it is not so easy. "