The first petroleum association for China's private oil firms, the China Chamber of Commerce for the Petroleum Industry (CCCPI), was established on Saturday in Beijing.

The chamber aims to protect the interest of small and medium-sized private oil firms in both the domestic and international oil markets, contribute to sharpening China's competitive edge on a global scale and safeguard the nation's petroleum resource security, says an association statement.

The association will participate in bilateral and multi-lateral co-operation worldwide, by extending communication with oil exporting countries and industry organizations, say CCCPI sources.

Initiated by privately-owned Tianfa Petroleum Co Ltd in Central China's Hubei Province, the country's flagship private oil firm, CCCPI currently includes over 50 private oil firms, taking in more than 20 provinces and regions nationwide, and serving as a major channel between the government and the country's private oil sector.

Wu Guihui, deputy director of Energy Bureau of the National Development And Reform Commission (NDRC), said: "As a platform for China's independent oil firms to communicate with the government and the outside world, CCCPI will bolster the petroleum industry's strategic development.

Chamber President Gong Jialong predicted vibrant prospects for CCCPI, as China's private oil sector is showing blistering growth momentum, and there is more capital injection to come from international banks and investors under the market economy mechanism.

CCCPI will not pose a threat to the State-owned oil marketers including PetroChina and Sinopec, but act as a "complementary partner" with the "mainstream State-owned oil companies", added Gong, saying there was support for the establishment of CCCPI from PetroChina and Sinopec.

A Sinopec department director, who declined to be named, said that CCCPI would not menace Sinopec's dominant position in China's oil market and hoped for win-win co-operations with CCCPI.

"CCCPI will help private oil firms fend off competitive pressures from both domestic and foreign oil giants, but will not change the competitive pattern in China's oil market," said an analyst with the Beijing-based CITIC Securities Research Institute.

Ambassadors from countries including Malaysia, Saudi Arabia, Iraq and Yemen, who also attended the ceremony, said they intend to widen co-operation channels with CCCPI in the petroleum industry.

China opened up its oil retail business to foreign and domestic independent oil companies from the same day that CCCPI was established, and the wholesale sector from December 2006, according to its WTO entry commitments.

Zhao Youshan, vice-president of CCCPI, said China's private oil business sector currently boasts total assets of approximately 200 billion yuan (US$24.1 billion), accounting for roughly 58 per cent of the country's petroleum industry.

(China Daily December 13, 2004)