For any one that is following LGOV
Sino-U.S. Company Leases LPG Depot in China
NEWPORT BEACH, Calif., Jan 16, 2001 /PRNewswire via COMTEX/ -- Largo Vista
Group Ltd. (OTC Bulletin Board: LGOV) today announced an agreement had been
reached with Zunyi Commercial Transportation Petroleum & LPG Co., Ltd., a
subsidiary of PetroChina, located in the Guizhou Province pop 30 million. The 5
year lease agreement with options gives full control of the LPG depot station,
filling workshop, railway platform bridge including pipelines, office facilities
and dormitories.
In 1998 the government restructured the petrochemical and petroleum industry by
making a clear division among PetroChina and China National Petrochemical
Corp.(CNPC) and Sinopec, China's largest oil companies. After the reshuffle,
Sinopec taps oil and gas reserves in southern and eastern China, CNPC controls
the oil assets in the north, leaving PetroChina to inherit most of the best
assets of CNPC. PetroChina and Sinopec have each agreed not to acquire oil
stations in the others market. This clear-cut division of natural resources and
exclusivity of consumer access establishes an entry barrier before the opening
of the retail market to foreign investors under the WTO in approx. 3 years. At
present, imported refined oil has been under a 69 % tariff. After WTO entry it
will reduce to 6%.
Mr. Li Chuming, one of Largo Vista's China representatives from Wuhan (located
in the Hubei Province headquarters for Largo Vista), stated, "This strategic
move for Largo Vista will open the possibility of entering the refined oil side
of the business through our lessor. Zunyi Petroleum is the current supplier of
diesel fuel in that region and offers a less competitive market that should
result in quick growth. As a comparison, Kunming Xinmao Industrial Petrochemical
Co Ltd. Largo Vista's subsidiary based in Kunming, Yunnan Province, directly
competes with the state owned LPG companies where bottom line profitability is
not one of their primary goals. The overall upside, is that these state owned
LPG companies are always restricted to one controlled county and cannot have a
presence in other counties or provinces (states). This limits their competitive
size and makes them prime merger/ acquisition candidates. To our knowledge we
are still the only Sino-Foreign joint venture with controlling interest in any
petrochemical retail operation in China.
This is Largo Vista's third LPG depot with goals of controlling six additional
in strategic areas. Once successful, we will increase our market share as the
largest LPG retailer in China."
For more information visit www.largovista.com or contact investor relations,
949-252-2180.
SOURCE Largo Vista Group Ltd.
CONTACT: investor relations of Largo Vista Group Ltd., 949-252-2180
URL: largovista.com
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