Exxon agrees biggest China deal

Demand is growing for petrol in China.

Exxon Mobil has announced its biggest single investment in China, a joint venture to run 750 petrol stations and a petrochemical refinery.

It will take a 22.5% stake in the service station scheme, alongside China's top refiner Sinopec, with 55%, and Saudi Aramco, with 22.5%.

The three firms are also working together on the refinery project due to begin in 2009 in Fujian province.

The foreign investment is worth about $5bn (£2.6bn), the firms said.

This compares to the £3.6bn Exxon and Saudi Aramco had set out in 2005.

All winners

The three firms said that the two join ventures were "the first fully integrated refining, petrochemicals and fuels marketing project with foreign participation in China".

They said the partnership wanted to tap into China's surging demand for petrol products and petrochemicals, and also included a long-term crude supply deal with Saudi Aramco.

Analysts said that the deal gave Exxon Mobil a foothold in the refinery and marketing sectors of China's oil industry.

Saudi Aramco, already the top supplier of crude to China, will have a guaranteed source of demand for its growing output.

Meanwhile, Sinopec benefits by securing supplies of petrol and petrochemicals.

"Everyone gets what they want," said oil analyst Qie Xiaofeng of Everbright Securities.

The refinery project, in which Exxon and Saudi Aramco will each take a 25% stake, will triple the capacity of the current Fujian oil refinery to 240,000 barrels per day.