Sinopec denies unit is reducing staff overseas
China Petrochemical Corp (Sinopec) said on Wednesday that one of its international units had withdrawn 263 Chinese employees from overseas markets since 2014 so that it could take full advantage of local labor resources.
Lü Dapeng, a spokesman for Sinopec, told the Global Times that the employees were recalled to China by Sinopec International Petroleum Exploration and Production Corp (SIPEPC), a wholly owned subsidiary of Sinopec that is responsible for overseas projects.
“The withdrawal is a normal staff rotation to optimize human resources,” Lü said, adding that the move also allowed the company to improve its management capacity and operating efficiency.
Lü’s comments amounted to a denial of reports about large-scale layoffs in overseas markets.
Media outlets have reported recently that Sinopec is restructuring its overseas assets and planning to recall 40 percent of its overseas staff in order to reduce costs.
At SIPEPC, “80 percent of the total employees are local people and about 700 employees are Chinese,” said Lü, noting that Sinopec’s overall overseas divisions have 51,000 employees from various countries and regions.
Analysts and media commentators have attributed the recalls to cost reductions that were made necessary by the slumping global oil and gas sectors.
Energy giants including Royal Dutch Shell Plc, BP Plc, Exxon Mobil Corp and Chevron Corp all recently lowered their revenue forecasts for this year and made large investment cutbacks.
There have been many problems surrounding SIPEPC’s overseas acquisitions from 2001 to 2014, such as irregular acquisition procedures, procurement prices that far exceeded the actual values of the assets and irregular consulting fees, financial news website caixin.com reported on Wednesday, citing an internal report of SIPEPC.
Many of SIPEPC’s projects in Australia, Syria and Brazil had performed below the expectations that prevailed at the time of purchase, the report said.
The report also said that Sinopec ordered SIPEPC to stop investing in worthless overseas assets and avoid more investment losses.