China petroleum and chemical group co., LTD. (hereinafter referred to as the China petrochemical group) 31 was revealed in 2014 audit problems, 46 million tons of crude oil processing capacity idle and subordinate company control problems of the industry. The audit results show that China petrochemical group has 31 problems in the aspects of major enterprise decision-making and management and development potential. China petrochemical (60028, SH) issued an announcement that night, saying it has established three levels of rectifying mechanism, and will actively promote the rectification. Edmond lee holdings experts said, to subordinate company regulation to strengthen is the common fault of the part of the state, as for the regulation of the state itself, though its subordinate company also in strengthening supervision, but also there are economic problems down trend. Lin boqiang, director of the China center for energy economics research at xiamen university, believes that sinopec is also actively working on production capacity, and believes that there will be a major improvement in crude oil production capacity around 2017. The focus of audit audit the sinopec headquarters and the China petrochemical group co., LTD., sinopec international petroleum exploration and development group commercial oil reserve co., LTD., and other four secondary units, found the China petrochemical group in financial management and accounting, making major decisions, and enterprise management, development potential, clean from the year before last year, the audit found problems in five aspects such as the problem is corrected. Enterprise decision-making and management, the audit results clearly put forward the existence of an illegal distribution of crude oil index, underestimation of overseas project risk factors, illegal purchase of problems, such as office building, highlights its controls on subordinate enterprise aspects of a series of problems emerged. Audit results in lists 14 subordinate company of sinopec violations, according to the "daily economic news" reporter, involves the amount of 9.467 billion yuan over the violation of jiangsu branch from refined oil wholesale and production and business operation qualification of enterprises purchase of refined oil products, involving a value of RMB 2.559 billion. Edmond lee, said state subordinate company relatively frequent violations, largely due to accountability and supervision mechanism is not sound, publishing audit results, for example, after the event does not have a clear subject to accountability, China petrochemical group accountability standards are not clear enough. Audit results also mentioned China petrochemical group in the development of potential problems, including lack of r&d, there is a big gas processing pressure, etc., reporter discovery, the space is improved in terms of excess capacity. From 2011 to 2014, sinopec oil processing capacity by 243 million tons to 284 million tons, but the actual processing capacity from 220 million tons to 238 million tons of crude oil, the implied, its 2014 idle reached 46 million tons of crude oil processing capacity. Lin boqiang says the excessive production capacity of crude oil is inevitable. He pointed out that before 2011, the domestic oil market growth reached 6% ~ 10%, but since 2012 the market steep growth fell to 1% ~ 1%, which makes around 2011 to start new projects caused serious supply exceeds demand, a lot of unused capacity. In addition, from 2011 to 2014, the company invested 7291 million yuan in 14 new chemical projects in 8 enterprises, such as yanshan petrochemical, which is owned by sinopec group. In the five projects of yanshan petrochemical 500, 000 tons/year of phenol acetone device expansion, the construction of 5 projects was suspended after 439 million yuan.
