OREANDA-NEWS. September 10, 2012. Shaanxi Yanchang Petroleum Group, which operates mostly out of Shaanxi province and remains overshadowed in China by the three largest oil companies, is preparing for an initial public offering to improve its profile and further its ambitions.

"The company is doing preparation work for a public listing, but the timeframe is unclear at this stage," its chief geologist, Wang Xiangzeng, told Dow Jones Newswires.

A spokesman confirmed Yanchang's plan to become publicly listed, but also said a timetable wasn't available.

The company, which has plans for overseas oil and gas exploration and domestic shale gas development, currently owns onshore oil blocks in 11 provinces and has a target to build 1,000 retail fuel stations by 2015.

It is in initial talks with Thailand, Madagascar, the Central African Republic and Kyrgyzstan for joint exploration, Mr. Wang said.

Yanchang is a major employer in the northwest Shaanxi province, with 109,000 workers, and the largest taxpayer, accounting for 16% of the local government's revenue last year. It is 100% owned by the provincial government.

It was one of six state-run companies short-listed in 2011 to participate in China's first shale-block auction, but ultimately wasn't awarded blocks due to the limited resources available, Mr. Wang said.

He added that the company still has plans to participate in the second such auction, expected in September.

Yanchang has so far drilled 16 shale-gas wells in Shaanxi, and half of them have already been fracked. It plans to invest 400 million yuan (\\$63 million) to develop shale gas this year, Mr. Wang said.

One of only four companies authorized to explore onshore for oil and gas in the country, Yanchang is targeting 12.4 million metric tons, or about 250,000 barrels a day, of crude output this year, Mr. Wang said.

The company will begin commercial production of natural gas next year, drawing from its 105.2 billion cubic meters of recoverable reserves. In the coming years, it plans to move away from the upstream sector and focus more on petrochemical projects, he said.

Despite competing with China's oil majors, it has forged partnerships with them--a joint venture with China National Petroleum Corp. for oil and gas exploration and a tie-up with China Petrochemical Corp., or Sinopec Group, to sell refined oil products.

It also has several partnerships with foreign companies, such as a joint venture with U.S. engineering firm KBR Inc.  KBR +1.50% to sell downstream technology and a pact with Royal Dutch Shell PLC  RDS.B +0.12% to build 100 retail fuel stations in Shaanxi.