Sinopec's major overhaul takes effect as four business divisions reshape the oil, gas, and chemical operating system.

Reuters, July 15 - Sinopec, the world's largest oil refiner, announced a major internal restructuring of the group. By establishing new specialized business segments and optimizing personnel allocation, it aims to boost operating profits to address the current industry situation of weak demand for domestic oil, gas, and petrochemical products. This adjustment is the largest organizational change in scale among domestic state-owned oil giants in recent years.

Four New Business Segments Formed, Headquarters in Trial Operation, Full Integration to be Completed by Year-End

The core of this restructuring is the establishment of four vertical business segments: Oil, Gas, and New Energy Business Segment; Refining, Chemicals, and New Materials Business Segment; Finance and Strategic Emerging Industries Business Segment; and Customer and Supply Chain Business Segment. Currently, the group's Beijing headquarters has begun operating according to the new organizational structure, and group-wide integration work will be fully implemented by the end of 2026.

Each business segment achieves unified business integration with clear positioning:

1. Customer and Supply Chain Business Segment: Unifies the group's marketing business for refined oil products, natural gas, and chemicals across all domains, incorporates the international trading platform Unipec, simultaneously assumes functions related to national energy emergency reserves, and connects the entire chain of production and sales, domestic and foreign trade, and reserves;

2. Refining, Chemicals, and New Materials Business Segment: Merges the two previously independent sectors of refining and chemicals, strengthens the synergistic capability of refining-chemical integration, takes high-end new materials as the core development direction, and promotes the upgrading of the product structure towards high value-added;

3. Finance and Strategic Emerging Industries Business Segment: Coordinates the group's supporting businesses in finance, leasing, and insurance, with a focus on empowering frontier strategic industries such as hydrogen energy, power batteries, carbon capture, and artificial intelligence;

4. Oil, Gas, and New Energy Business Segment: Coordinates the development of traditional oil and gas resources while simultaneously laying out new energy businesses to build a pattern of coordinated development between new and old energy.

Restructuring Accompanied by Personnel Adjustments: No Layoffs, Headquarters Staff Move to Frontline to Empower Business

Addressing market concerns regarding personnel changes, internal employees clarified that this reform is not about layoffs or workforce reduction, but about restructuring functional departments with a performance-oriented approach. After the adjustment, the staff size at the Beijing headquarters will be streamlined, and hundreds of headquarters employees will be transferred to various frontline business segments to strengthen business capabilities.

The reform grants the four major business segments independent authority over personnel and compensation management, making operational assessment responsibilities clearer and fully stimulating the vitality of market-oriented operations in each segment.

Restructuring Accompanied by the "Second Venture" Top-Level Strategy, Promoting High-Quality Development via Multiple Paths

This organizational adjustment is a key supporting measure for the implementation of Sinopec's "comprehensive second venture" strategy. Group Chairman Hou Qijun stated in a signed article published in the magazine "Qi Zhi" (Flag) last month that the enterprise will rely on four core strategies—innovation-driven, industrial transformation and upgrading, stable resource guarantee, and cost leadership—to comprehensively promote high-quality development.

Industry analysis indicates that in the context of slowing growth in domestic refined oil consumption and overcapacity in the refining and chemical industry, this divisional reform can break down barriers across various links of the industrial chain, reduce internal coordination costs, and concentrate resources to lay out high-growth tracks such as new energy and new materials, thereby improving the group's overall profitability level in the long run.