According to the Wall Street Journal, China Petroleum & Chemical Corp., China's largest refiner, last Wednesday said it was establishing a new subsidiary to house its lubricants business as part of an effort to bring private capital into the division.

The move comes as the state-controlled company, known as Sinopec, attempts to restructure its operations following a landmark reform blueprint that Chinese leaders issued late last year, the article stated. The framework called for state-owned enterprises to bring in private investors in a bid to improve returns and efficiency.

Sinopec had created a division for its lubricants in 2002 but the company said Wednesday that the new subsidiary would allow the business to bring in private investment.

"The incorporation of Sinopec Lubricant Co. creates a mechanism through which external capital can be channeled into Sinopec Corp.'s lubricant business to accelerate its development," the company said in a statement. Sinopec is Asia's largest manufacturer and distributor of lubricants, according to the statement.

All of Sinopec's lube refineries are in China, and until last year in July, all of Sinopec's lubricant blending plants, were in China when it opened its new S$134 (US$107) million 100,000 tons per year lube blending plant in Tuas, in the southwestern part of Singapore.

Sinopec has several lube base oil refineries, all in China, specifically Gaoqiao (API Group I and API Group II), Hangzhou (API Group I), Jinan (API Group I and API Group II), Jingmen (API Group I and API Group II), Maoming (API Group I), Nanyang (API Group I) and Yanshan (API Group II), with a combined capacity of 18,460 bpd of Group I and 16,900 bpd Group II lube base oils.