New Sinopec boss presses reset for world’s biggest oil refiner

Hou Qijun has embarked on a mission to revitalize Sinopec, the world's largest refiner, amid dwindling fuel demand, excess petrochemical capacity, and a dire oil crisis. Appointed as Sinopec chairman a year ago, Hou has initiated an overhaul, dividing the company into four profit centers: oil, gas and new energy, refining and chemicals, finance and strategic new business, and a segment merging global trading with marketing teams.

Hou addressed the challenges in his July article in a government magazine, emphasizing the need to overcome institutional inertia and the 'big company syndrome' that hampers responsiveness to market changes. Sinopec's fuel sales have plummeted to 2017 levels, and the company faces a tough battle to maintain its domestic market share.

Notably, an executive close to Sinopec shares asserts that Hou, at 60, is determined to save the company, despite the typical retirement age of 63 for Chinese state executives. Despite the Iran war and government-imposed curbs on oil price hikes, Sinopec reported a 19% increase in net profit for the first half of 2026. However, the company's heavy reliance on oil supply disruptions poses a significant challenge.

Hou believes that the future lies in producing chemical materials rather than gasoline and diesel, given the decreasing demand for transport fuels due to vehicle electrification. Moving forward, Sinopec plans to invest about 20% of its capital spending on new energy and new materials over the next four years. Hou has earmarked over 30 billion yuan ($4.46 billion) annually for new energy and new materials projects, including growing reserves, producing shale oil, developing sustainable aviation fuel, and reducing refining costs.

The company will also focus on converting technology into productivity through more than 30 projects by 2030. Competition in the higher-value petrochemicals sector is fierce, with rivals like Wanhua Chemical and Satellite Chemical vying for market share. Sinopec is set to initiate commercial development at the Jiyang trough, part of its flagship Shengli oilfield, where conventional reserves are rapidly depleting.

As a geologist, Hou has a deep understanding of the energy value chain and has previously managed the pipeline assets of China's three oil majors.