20-03-09 Total, Europe's third-biggest oil producer, is planning to set up new refining and petrochemicals projects in China to take advantage of the new oil products pricing system which allows competitive pricing and an appropriate profit margin for oil refiners.
"The Chinese government is going towards a more competitive pricing. We like competition, because we think we are better and we can win," Jacques de Boisseson, chairman and general representative, Total China, told at the sidelines of China International Petroleum and Petrochemical Technology and Equipment Exhibition in Beijing.

Total currently operates one refining project and has no petrochemicals project in China. China changed its pricing system for oil products in January, by moving it closer to the global level. A market-based ceiling that takes into account the cost of crude oil replaced a guidance band for retail fuel prices.
The good performance of its first and only refinery in China is another factor that is boosting Total'sintention to open more refineries, the report said.

Total has a 22.4-% stake in a $ 1-bn refinery at Dalian in Northeast China's Liaoning province. Its partners include PetroChina, the nation's biggest oil company, Sinochem and the Dalian municipal government. The refinery, known as West Pacific Petrochemical Co, has an annual crude processing capacity of 10 mm tons.
"Our strategy in China is to grow all our businesses," Boisseson was quoted as saying.

Total is also planning to produce oil and gas in China in the near future, he said. It has recently set up a venture with PetroChina to tap natural gas at the South Sulige block, in North China's Inner Mongolia autonomous region, by 2011.
The South Sulige block is said to hold more than 100 bn cm of proven gas reserves.