China’s Sinochem Group is reviewing its struggling oil exploration business and plans expansions into material and life sciences over the next decade in major strategy shift, the chairman of the state-run conglomerate said.

Last week, Reuters reported that Sinochem had retained three banks to work on a possible listing of its oil refining, fuel marketing, and trading and storage assets while the upstream oil business might be sold to the government.

"Based on current market conditions, we are re-evaluating our strategy in the upstream oil and gas business," Ning said in an email to Reuters in response to interview questions sent as part of the 19th Communist Party Congress taking place in Beijing this week.

Sinochem has tapped Morgan Stanley, Citic Securities and BOC International to work on the possible Hong Kong listing to raise capital and revive the company, Reuters reported.

Sinochem aims to build itself into a conglomerate using petrochemicals as the foundation but led by material science and life sciences, a change from previously "scattered resource allocation and lack of focus in core businesses," said Ning.

The new business strategy comes as Sinochem is anticipated to merge with China National Chemicals Corp, or ChemChina, under a state-orchestrated restructuring to join the companies.

Meanwhile, Sinochem Group appeared to deny a media report that it was bidding for a stake in Chilean lithium producer SQM being sold by Canada’s PotashCorp.

"Up until now, neither Sinochem Group nor our subsidiaries have had such intentions or plans," the company said in response to a request for comment from Reuters.

The Financial Times reported that Sinochem, a Beijing-based chemicals and oil conglomerate, was among four Chinese bidders for a $4 billion stake in Chile’s Sociedad Quimica Y Minera (SQM), one of the world’s largest lithium producers. It cited people familiar with the process.

Lithium is a key raw material for batteries in electric vehicles, which are enjoying a massive rise in popularity in China. Ningbo Shanshan also said that it was not participating in a bid to acquire equity in SQM, while Tianqi Lithium and GSR Capital did not respond to requests for comment.

Potash Corporation of Saskatchewan Inc was in September reported to have hired Goldman Sachs and BofA Merrill Lynch to explore selling its 32 per cent stake in SQM.