CITIC to buy stake in ChevronTexaco's China venture

CITIC Resources Holdings said it would take a majority stake in ChevronTexaco's retail oil venture in China, as the country slowly opened up its State-controlled oil distribution business.
Natural resources and commodity provider CITIC Resources, a unit of Beijing-backed conglomerate CITIC Group, agreed to take a 50.5 % stake in Caltex South China Investments for HK$ 351 mm ($ 45 mm). ChevronTexaco's subsidiary, Caltex (Asia), would hold 36.88 % of the venture and the remaining 12.62 % by Star Concept Holdings, CITIC Resources said.

CITIC is a marginal player in China's oil sector, although it is a powerful state firm active in banking and property, and its involvement in the venture could give limited boost to the US oil firm's business in the country, industry sources said. Retailing in the world's No. 2 oil consumer is dominated by China's top two State-owned firms, Sinopec and PetroChina.
Only the world's leading oil majors -- ExxonMobil, BP, Shell and Total -- are foreign companies,all via alliances with Chinese State-owned oil firms. These global firms are expected to operate a combined 2,000 service stations jointly with China's State-owned firms along its booming coastal regions in the next few years.
"Without a tie-up with either Sinopec or PetroChina, the prospect to grow in China looks gloomy," said a retail executive at a foreign major.

ChevronTexaco, via its retail unit Caltex, was among the earliest to enter China's oil market but has in recent years lagged behind its peers in expanding its market share. Caltex operated 42 petrol stations in southern Guangdong province, one in Fujian and four in Macao, a Caltex China official said.
CITIC Resources said the south China joint venture would be granted non-exclusive and non-transferable license to use the "Caltex" trademarks in Macao as well as Fujian and Guangdong provinces.