Sinopec America: Consolidate platform for sustainable development

Zhang Jixing, president at Sinopec America and chief representative at Sinopec USA Representative Office, is confident about the new direction Sinopec is taking. MAY ZHOU / CHINA DAILY

Since its first coming to the US in 1988 as a trade company, Sinopec's US operation has developed considerably in 28 years. Now there are eight subsidiaries doing business from upstream to downstream.

Last year, an umbrella management company named Sinopec America, Inc. was created to consolidate and supervise all of Sinopec's subsidiaries in the US.

"In the past, the eight subsidiaries operated independently of each other. With our long and complete production chain here in the US, we found it necessary to consolidate our resources for our sustainable development here," said Zhang Jixing, president at Sinopec America and chief representative at Sinopec USA Representative Office since August 2015.

Zhang said that Sinopec America functions as a consolidated platform with one voice, one policy, one name and one brand. "In the past when people wanted to do business with Sinopec, they were confused as to who to talk to because each subsidiary represents itself and part of Sinopec, but not Sinopec. Now, people can come to me and I will direct them to the proper one," said Zhang.

Beginning last year, Sinopec's subsidiaries scattered in different locations in Houston and New York started to move to Sinopec's office building in Houston. Acquired in 2014, the high-rise building is located in the prestigious business and financial district Galleria. The move is expected to be completed in late 2016.

Five divisions have been created for Sinopec America to coordinate its US operations: Administration, Legal & Risk Control, Accounting, HR and strategy & branding, according to Zhang.

"Our function is to consolidate and optimize all the resources in the states, ensure compliance of regulations, and provide support to all the subsidiaries so that they can focus on business development," said Zhang.

In house and an arbitrator at China International Economic and Trade Commission, Zhang joined Sinopec in 1985 and has had well-rounded experiences within the company. For the past three decades he worked in various careers: legal consul, finance and accounting, international trade and business, project management, foreign affairs and legal management.

Prior to coming to Houston, Zhang was the Director General at Sinopec's legal department for five years. He was named one of Top Eight General Consul by Asian Business Law in 2013. Thanks to his effort, Sinopec was selected the Best Chinese "In House Team of the Year" for five consecutive years by China Law & Practice magazine. Sinopec's legal department was also ranked No. 1 among China's large SOEs.

Zhang is not a stranger to Houston. "I worked in Houston in late 1980s. The city has not changed much. To me a lot of things are just like a recall."

Zhang had worked as Deputy Director General at Sinopec's foreign affairs department for a decade. He was involved in exchanges with top senior international oil executives and governmental officials. Such experience acquainted him with many senior executives in major oil companies in Houston before his current career. It gives Zhang an edge in bringing Sinopec's US operations to a new level.

Among China's SOEs, Sinopec America as an umbrella management company is a first. "I do feel somewhat pressured because there is no prior model. It's a new path we are exploring. If we succeed in creating an efficient platform with integrated resources, we can replicate the model for our operations in other regions around the world," said Zhang who is optimistic about the new direction Sinopec is taking.

Besides internal management, another major task for Zhang is to promote Sinopec in the US. Representing Sinopec, Zhang participated in various business events in Seattle, Washington D.C. and New York during Chinese President Xi Jinping's visit in Sept 2015. He also met with local and federal officials on various occasions.

Locally, Sinopec was one of the title sponsors along with three other major US companies including ExxonMobil for the reception hosted by Asia Society Texas Center in honor of Chinese Vice Premier Liu Yandong last year. Zhang also attended Houston's annual Consular Ball, among many other events. In contrast to its quiet practice in the past, Sinopec's image began to be more visible with the creation of Sinopec America.

Ranked No.2 on Fortune's Global 500 list in 2015, Sinopec Group is one of the largest integrated energy and chemical companies in the world. Its principal operations include the exploration and production, storage, transportation, sale and import & export of oil and gas as well as oil products, petrochemical products, coal chemical products, synthetic fiber, fertilizer and other chemical products, and other commodities; and research, development, application, sale and import & export of technologies.

As a multinational company, Sinopec operates in 76 regions and countries with about one third of its asset and revenue coming from its international business.

Sinopec's US operation ranges from gas and oil exploration and development to commodity trade, import and export of equipment and material, R&D, EPC contracting for petrochemical plants and public relations. Besides its US headquarters in Houston, Sinopec maintains offices in New York, Washington and Oklahoma.

"Our US operation focuses on assets and resources with a relatively complete production chain. In upstream, we have a total of six blocks of oil and gas fields in the US" said Zhang.

Its three trading companies conducts trade of equipment, materials, technology, oil and chemicals with business extending north to Canada and south to Brazil. Its R&D focus on both upstream E&P technology and downstream refinery technology in close collaboration with eminent partners.

For engineering, procurement and construction (EPC) contracting, Sinopec Engineering Group America is working as the EPC contractor for a PTA/PET project in Texas. The project will be the world's largest single line PET plant with a capacity of 1 million tons per year upon completion.

Zhang summarized the company's 2015 operation in a nutshell:

"In 2015, we produced 2 .36 million tons of crude oil, and traded 13.71 million tons of crude oil and oil products. Our 2015 revenue was $12.5 billion."

In 2015, for Sinopec corp. as a whole, its total revenue reached $312.3 billion (converted from RMB 2,018.9 billion) with operating profit of $8.82 billion (RMB 57.0 billion). Its refinery throughput increased slightly to 236.49 million tons over 235.38 million tons in 2014. Its oil and gas product reached 471.91 million barrels, slightly down from 2014's 480.22 million barrels.

mayzhou@chinadailyusa.com