- Â The license is the first of its kind the nation has awarded to a foreign firm that allows it to independently trade in China’s wholesale market.
- Â The deal indicates China’s willingness to draw in more international participation in the nation’s oil sector.
Royal Dutch Shell plc (Shell), a renowned European multinational oil & gas company, has reportedly been awarded a trading license by the Chinese government that allows it to independently trade its oil products in China’s wholesale market.
Reports cite, the license signifies the Chinese government’s willingness to draw in more international players to the nation’s oil sector, creating more competition and propagating growth across the domain.
According to a report by Nasdaq
, the government awarded the license to Shell China’s wholly-owned subsidiary, Shell (Zhejiang) Petroleum Trading Co. The license would allow the company’s Zhejiang branch to carry out sales as well as purchase of oil products for the company’s customers in China.
Sources familiar to the matter claim, the license, awarded by the Chinese government’s Ministry of Commerce, is the first of its kind that has been granted independently to a foreign firm.
The Global Head of Trading & Supply Business Department at Shell, Jacek Dziembaj stated that after acquiring the wholesale trading license for its oil products, the company would be able to facilitate better quality trading services to its customers in the domestic wholesale market of China.
The government’s decision to open up the oil sector of china reportedly comes under Beijing’s ongoing commitment to liberalize the nation’s economy and strengthening its domestic oil market.
Analysts claim, the wholesale oil market of China is currently facing an oversupply, a factor that would allow the company to seek upstream suppliers with relative ease.
According to reports, Shell currently owns & operates over 1,300 gas stations throughout China and plans to double the capacity by 2025.