Three oil majors market status and advantages

Three oil majors market status and advantages

January 15, 2010/Dong Xiucheng

At present, according to scale of enterprise ownership and market development and other factors, China's oil market players can be grouped into four categories: three traditional oil group, emerging State-owned oil company, private oil companies and foreign-owned oil companies.

At present, the Group of three traditional petroleum (petroleum, in Sinopec, CNOOC) as a national oil company, still occupies a dominant position in the domestic oil market.

Despite the competition in the market, there are three oil Group mutual length, but CNPC on the resource quantity, occupy an absolute advantage. PetroChina registered oil and gas blocks in the country, with 67%, Sinopec, and only 22%, other for Sea oil in all. Reserves of petroleum have extensive, so it's more flexible in terms of long term capital investment, especially in a downturn in oil prices reflected more clearly.

Compared with PetroChina, Sinopec upstream relative shortage of resources and do not have the advantage. However, Sinopec's position in the downstream business par with China's position in the upstream business, among the best in the world. Sinopec, Asia's biggest, currently the world's fourth largest oil refining company. With more than national 80% refinery of Sinopec, China sour crude processing base (zhenhai, Maoming and qilu, and Jinling) are all affiliated subsidiary of Sinopec. In addition, by virtue of its monopoly advantage of Sinopec more while refining and chemical enterprises, also because of their lower refining and sale of strong strength in retail areas occupy a larger share of oil products.

Compared with PetroChina and Sinopec, CNOOC, a late start. Currently, CNOOC, China's offshore oil industry dominated, great growth potential. As CNOOC owns and franchises of foreign cooperative exploitation of offshore oil and gas resources, making it stronger market position. Through international cooperation for the development of offshore oil and gas resources in China, CNOOC gained international standards of offshore oil and gas exploration and development technologies, as the deepening of the cooperation, CNOOC expanding areas of cooperation, from the upstream development to the downstream, from entering the field of financial services in the field of production, and effective use of international capital, and from domestic to abroad. However, as crude oil exploration and mining is the main industry of the upper reaches of the pure company, CNOOC in crude oil output relative to PetroChina, Sinopec disadvantage. CNOOC to build the framework of the transnational corporations, the implementation of the management system reform, reform of distribution system of enterprise labor, personnel, and provide places for workers, stimulate the enthusiasm of the workers, increasing the vitality and competitiveness of enterprises is an important initiative, also established obstacles to the reform of State-owned enterprises. CNOOC in three system reforms introduce a competition mechanism, form Manager nengshangnengxia, staff can be hired out, income can be increased or reduced mechanism of thought and practices, in terms of manpower resources allocation, marketization and internationalization has been basically achieved.

Three major companies in competition with each other, their respective advantages gradually: PetroChina relies on rich resources, by virtue of the monopolistic advantages to earn high profits; Sinopec taking long marketing channels, while in the consolidation of the downstream market, strengthen cooperation with foreign and "separatist" marine oil in the sea, with a good international image, efficient management system, unique international petroleum community.