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from Breakingviews:

Sinopec petrol sale attracts a motley bunch

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Sinopec’s petrol station stake sale could drum up a mixed bunch. The Chinese oil giant is seeking investors to help develop Sinopec Sales, which operates its vast network of filling stations. Prospective buyers from food retail, energy, technology and private equity have been shortlisted, according to Reuters. But the price tag of around $16 billion for a 30 percent stake could force them to club together.

Sinopec Sales operates 30,000 petrol stations. Energy distributors like ENN may see some logic in owning more of China’s fuel delivery network. Yet buyers from a range of other industries see greater potential in developing additional sources of income.

Take retail. Though Sinopec Sales has 23,000 Easy Joy convenience stores, these currently bring in just 1 percent of the group’s revenue. Boosting that figure could be lucrative: for established retailers, profit margins on non-fuel sales are three times higher than the 1.7 percent Sinopec Sales squeezes out at the moment. That explains why Alimentation Couche-Tard, the Canadian owner of Circle K convenience stores, is on the shortlist.