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"Mr. Mavi, your perspective is exactly the same as ours!" Wu Guanyu and Ren Yuan listened attentively as Mavi spoke confidently in front of them. They both believed that China's oil market had immense potential for the future—it was simply in its development stage.
"Mr. Mavi, since we're on this topic, I have a question for you. How many tons of crude oil is your Russian government willing to supply us annually?"
Wu Guanyu and Ren Yuan were very concerned about this matter. Although they were competitors, from a national strategic perspective, their competition was a healthy one that could promote development.
Upon hearing their question, Mavi smiled and responded, "Mr. Wu Guanyu, Mr. Ren Yuan, how much crude oil do you expect the Russian government to supply your country each year?"
As soon as Mavi finished speaking, the two executives exchanged glances before tentatively asking, "Mr. Mavi, um… if possible, we hope your country can supply us with 10 million tons of crude oil annually for our domestic market."
In 2001, 10 million tons of crude oil was already a substantial amount for China.
At that time, the domestic automobile industry was not yet well-developed, and the country's average annual oil consumption was 189 million tons. About 60% of that, or 113 million tons, was domestically produced, while the remaining 76 million tons had to be imported.
So, the 10 million tons of crude oil they requested accounted for roughly 13% of China's total oil imports—a significant proportion.
However, after posing this question, both Wu Guanyu and Ren Yuan saw Mavi shake his head slightly and thought their request had been rejected.
After all, oil is a strategic resource, and many countries barely have enough for their own use, let alone for export. Moreover, direct supply agreements are usually priced lower than market rates, making them far less profitable than retail sales.
But they were wrong!
The reason Mavi shook his head was that their requested amount was far too small—not even within his consideration.
"10 million tons per year? That number… seems a bit low, don't you think, Mr. Wu Guanyu, Mr. Ren Yuan?"
"If your country is willing, my company, Ma V Energy, can supply at least 35 million tons of crude oil annually—directly solving 46% of China's oil import needs!" Mavi declared firmly.
The moment those words left his mouth, Wu Guanyu and Ren Yuan were completely stunned, sitting frozen in their seats.
They had never expected that the Russian government would agree to let Ma V Energy supply them with so much oil—nearly 50% of China's import demand! This was incredible!
"Mr. Mavi… did you just say… 35 million tons of crude oil? Is that number accurate?" Wu Guanyu and Ren Yuan, still in disbelief, asked again for confirmation.
"Of course, 35 million tons is absolutely accurate, Mr. Wu Guanyu and Mr. Ren Yuan. However, given such a large supply volume—and at a price below international market rates—I think we need to discuss the conditions, don't you?"
For Mavi's two oil fields, 35 million tons of annual supply was not a big deal. With a total reserve of 10 billion barrels of crude oil, and each barrel equating to roughly 0.135 tons, that amounted to 1.35 billion tons in total reserves.
At a rate of 35 million tons per year, it would take 40 years to fully extract—until 2041.
However, Mavi was no philanthropist. When he negotiated with the Russian government for this large supply deal, it wasn't just to show off in China.
"What kind of conditions, Mr. Mavi? Please, tell us. If it's something we can do, we'll certainly find a way to make it happen," Wu Guanyu and Ren Yuan said seriously.
"The conditions are actually quite simple. Currently, the domestic gas station industry is too fragmented, making price regulation difficult," Mavi explained.
"So… I wonder if you two are interested in consolidating and acquiring these scattered private gas stations? By bringing the entire industry under better regulation and control, we could create a more standardized and efficient market," Mavi suggested, addressing Wu Guanyu, Vice President of PetroChina, and Ren Yuan, Vice President of Sinopec.
At that time, China's gas station industry was highly disorganized. Fuel prices varied significantly across regions, pricing was unregulated, and service quality was inconsistent.
Some private gas stations even imported fuel through unauthorized channels, resulting in low-quality gasoline that caused numerous problems.
"Unifying the private gas stations?" Upon hearing Mavi's proposal, both executives' eyes lit up. The idea was quite promising.
However, acquiring all private gas stations would require an enormous financial investment. For PetroChina, which had been established for less than three years, and for Sinopec, which had only recently begun expanding, this was a difficult challenge.
"Mr. Mavi, your proposal is indeed excellent. However, as you know, there are nearly 25,000 private gas stations in China. Acquiring such a vast number would take a long time, and some businesses may be unwilling to sell…"
Wu Guanyu and Ren Yuan hesitated, expressing their concerns. Although the idea was good, PetroChina and Sinopec simply did not have enough capital at the moment.
Mavi understood their concerns immediately—it all boiled down to funding. They would probably need a year or two to gather the necessary resources.
So, Mavi smiled and said, "How about this, Mr. Wu Guanyu and Mr. Ren Yuan? If we estimate each private gas station to be worth 300,000 RMB, the total cost would be 75 billion RMB, or about 9.37 billion USD."
"Since acquiring private businesses usually requires a premium, if we offer 400,000 RMB per station, many owners will likely be tempted. That would bring the total cost to 100 billion RMB, or 12.5 billion USD, correct?" Mavi calculated out loud for the two executives.
Wu Guanyu and Ren Yuan exchanged puzzled glances. They couldn't quite figure out why Mavi was doing the math for them…
(End of Chapter)