Becoming a Russian Oligarch After Rebirth
Chapter 810 - 806 How Much Can Be Earned (Long - for Monthly Pass)

Chapter 810: Chapter 806 How Much Can Be Earned (Long Chapter for Monthly Pass)

The negotiations went quite smoothly; after all, China at that time was desperately craving foreign investment!

Those who lived through that period should know that, to attract investment, related departments across the nation each demonstrated their unique approaches with an all-out effort.

All sorts of strategies were deployed, and when they spotted a foreign investment project, it was like a hungry wolf eyeing its prey, their eyes turning green with eagerness...

Wang Ye had stated before the negotiations that as long as China could show enough sincerity, then Yukos’s investment would have no upper limit!

This statement was quite "overbearing," but Wang Ye, or rather Yukos, had the credentials to make it.

The Group’s cash flow was extremely abundant, with tens of billions in US dollars lying in its accounts, worrying about nowhere to spend it.

If that wasn’t enough, the major shareholders could add more investment at any time, or given Yukos’s corporate credit, any major international bank could easily grant them a low-interest loan of tens or even hundreds of billions of US dollars without any problems.

Because nobody worried that they wouldn’t be able to repay the loans...

This meant that Wang Ye could always bring out at least ten billion, or up to twenty billion US dollars in cash for investment!

And this was just the amount ready to be invested in one go; if the investment period were to be extended or divided into stages, the upper limit would be even more absurdly high.

That’s the power of an oligopolistic energy enterprise—not only are the profits high, but the cash flow is also incredibly abundant.

In other traditional industries, it would be very difficult to keep that much cash on hand.

........

Under the allure of the "super pie" thrown out by Wang Ye, coupled with the fact that he was seen as a trustworthy "insider," Deputy Minister Li swiftly gave a response.

"The senior department is very interested in the investment plan put forward by Mr. Mikhail and has made significant approvals. In principle, there is no problem with both oil refinery bases being established, one in Liaoning Province and the other in Western Guangdong.

Regarding the issue of Yukos Group wanting to open gas stations that Mr. Mikhail mentioned, after collective discussions by the relevant departments, it is possible to open up trials in Guangdong Province and the Northeast region.

These two regions are after all where your oil refinery bases can distribute, and if it’s any further away, it wouldn’t be reachable anyway..."

Clearly, Wang Ye’s plan was basically accepted by everyone!

As for the crude oil supply for the Western Guangdong Oil Refinery Base, that issue was also resolved, although it is estimated that it would take an additional two or three years to start production.

The base’s crude oil would be supplied through the latter part of the "Andana Line," which is the pipeline that leads to Nahodka.

The crude oil would be transported via tanker ships from Nahodka to the ports of Western Guangdong to supply the oil refinery base.

Originally, the port of Nahodka was meant to supply oil to Japan and Korea as well as other Asian countries; in fact, it is not far from Guangdong Province, and the costs of transportation by tanker ship are not that high.

The approval for Yukos Group to establish its own brand of gas stations was also granted.

Even though the region is restricted to only the Northeast and Guangdong Province, that was more than enough!

Because what Wang Ye really wanted was the Guangdong market.

Of course, opening up these markets to Yukos does not mean that these markets will be exclusively operated by Yukos; they will still have to face competition from the two domestic oil giants.

According to Wang Ye’s knowledge, over the next twenty years, a total of more than seven thousand standard gas stations were built all across Guangdong Province.

The three provinces in the Northeast added up to a similar number.

Even if it’s just a share of fifteen thousand gas stations, as long as you act quickly enough in the early stages, seizing half should not be a problem.

That would be seven to eight thousand gas stations. Let’s calculate with eight thousand.

How much money could these gas stations earn for Wang Ye in the future?

Perhaps many people do not have a clear understanding of the profit margins of gas stations, but we can roughly calculate it.

Under normal circumstances, a domestic gas station can earn about one thousand yuan per ton of gasoline, and this refers to the situation where they only make a retail profit from purchasing finished fuel.

But don’t forget, in the future, the gasoline sold at Yukos gas stations will be produced by their own refineries!

And the crude oil for the refineries will come from their own supply, so the profit margin will be much bigger...

One ton of gasoline is 1350 liters, calculated at the 2003 gasoline price of 4.5 yuan per liter.

So, the retail price of one ton of gasoline is nearly six thousand yuan!

Because all stages from crude oil to refining and to retail belong to them, Yukos gas station’s gasoline supply costs can be reduced to below three thousand yuan per ton!

This calculation is already after deducting the profits to be shared with the partners.

That means a gas station could earn a gross profit of three thousand yuan for every ton of gasoline sold!

An average gas station, not in a particularly remote location but not in a very good one either, can sell about ten tons of gasoline per day.

Stations in Guangdong Province will definitely sell more, while those in the Northeast will sell a bit less. Let’s just average it to ten tons per station per day.

That means a gas station’s daily gross profit is thirty thousand yuan!

That’s ten million yuan a year.

How about eight thousand gas stations...

Eighty billion yuan!

And this is not revenue, but gross profit!

Now you understand why companies like CNPC and Sinopec can earn so much money.

And those companies still bear significant operating costs, maintaining many employees, and also having to purchase crude oil from abroad, yet they still earn so much money.

Now that Yukos handles everything from upstream to downstream themselves, the profit margin is obviously going to be much larger!

This is also why Wang Ye insisted on securing the qualification to enter the gas station market!