China National Petroleum Corporation (CNPC) has launched a major corporate restructuring programme to prioritise renewable energy development and streamline other business segments as it chases a net zero emissions target.

In a master plan announced by chairman Dai Houliang late last week, the state-controlled oil and gas giant will trim the number of its business departments from nine to four.

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The country’s top energy provider follows hot on the heels of international peers in looking to reduce its carbon footprint as it targets net zero emissions by 2050 — 10 years ahead of China’s national target.

CNPC supplies 50% of China’s crude oil and 70% of China’s gas demand.

“It is a challenge for the company to leverage short-term needs over long-term interest,” said a company official who declined to be identified.

The plan calls for reorganising its nine business segments into four subsidiaries: oil, gas and new energy; refining, sales and new materials; support and service; and capital and finance.

The nine current business segments are: oil and gas exploration and development; refining and chemicals; sales and trading; pipeline and storage; engineering and technology services; engineering and construction services; equipment manufacturing and finance services; and overseas exploration and development.

The new oil, gas and new energy group will combine CNPC’s existing units including exploration, production, gas sales, gas tanks, oil and gas production fields and those coming under its downstream gas company, Kunlun Energy.

CNPC’s service unit CNPC Services will be incorporated into the new support and service group after it launches an initial public offering in about two to three years.

“The overhaul is the strategic choice for CNPC to better follow the global energy transition trend,” said the company official.

“It is not easy, as CNPC as a national oil company is double tasked to ensure fossil energy supply and lead in energy transition,” he said.

Dai said at an international forum on energy co-operation in November last year that the global energy landscape is undergoing a profound reform. Low-carbon energy sources such as hydrogen, wind and solar are key to the energy transition.

Under CNPC’s new structure, the headquarters in Beijing will act as a strategy centre to co-ordinate corporate operations, while the four subsidiary groups will be operation and profit centres, and grassroots oil and gas fields and refineries will be bases for implementing the strategy.

It is the first time CNPC has put new energy development on a par with oil and gas in terms of priority.

Dai said earlier that his company will take a three-stage approach to achieving its own target for a carbon emission peak in 2025 and net zero emission in 2050.

Initially, CNPC will maximise its gas operations by raising the gas portfolio in its energy supply mix to 55% by 2025.

Dai said CNPC will promote solar and wind-based energy projects in oil and gas acreages licensed by the government in China.

The company will also apply carbon capture and storage technology to cut emission and replace fossil fuels with renewables.