British oil giant BP's two joint ventures to develop retail gas stations with major Chinese firms Sinopec and PetroChina are expected to immediately begin operations, BP China President and Chief Executive Gary Dirks said Thursday.
"I believe they will work within the next two months," Dirks said.
But that in itself was an understatement by Dirks, who revealed that the preparatory work on the joint ventures has finished.
Dirks said that the joint ventures have won government approval and negotiations between companies have completed.
The two joint ventures were part of landmark trade agreements between China and the United Kingdom signed on Tuesday during Premier Wen Jiabao's visit to London.
BP signed joint venture contracts and articles of association for both the BP Sinopec Zhejiang Petroleum Company Limited and the BP PetroChina Petroleum Company Limited.
These joint ventures will each acquire, build and operate 500 retail service stations in Zhejiang and Guangdong provinces by 2007. Fellow British oil giant Royal Dutch/Shell has also signed a contract to set up a joint venture with Sinopec to open 500 service stations in Jiangsu Province.
The long-awaited deals illustrate that China is officially allowing foreign companies into its once tightly controlled and lucrative retail market for oil products, analysts say.
China will allow foreign companies to operate retail businesses from 2005 and wholesale business from 2007, according to its commitment to the World Trade Organization.
But Dirks believed the impending opening will not have a big impact on BP's operational mode in China.
"We will continue working with our current partners (Sinopec and PetroChina)," he said.
But Dirks said BP will definitely expand its retail service beyond the current two provinces as the market opens further.
Although he declined to give details, Dirks said: "We are talking about the next destinations with our two partners."
He denied the reports that BP is planning to set up 600 stations in Fujian Province in co-operation with PetroChina.
"We are working with PetroChina in that province, but the number is not so large, and just about 30 to 50," he said.
(China Daily May 14, 2004)