The oil industry must create a new Chinese model

Chen Gengri, former party secretary and general manager of China National Petroleum Corporation, wrote “China Petroleum Industry 30 Years” and pointed out: “Over the past 30 years, China’s oil industry has achieved tremendous achievements in reform and development. At present and in the period to come, China’s oil industry reform And the development is facing more severe challenges.” As an oil worker who participated in the entire process of oil industry reform, I very much agree with Mr. Chen Geng’s judgment that the challenges faced by the Chinese oil industry are not only manifested in oil source competition and guarantee of supply security. On the other hand, how to improve the operational efficiency and effectiveness of CNPC is also an urgent issue.
The center of gravity will have to shift What is the current state of energy in the world today? Russia's political elites describe it this way: The world’s major oil consuming countries are highly developed and rising emerging powers. The main oil and gas reserves are concentrated in a relatively small group of developing and transitional economies. Consumers like the United States, the European Union, and China have concentrated their economic and political resources on the same energy market, leading to increased competition. Most resource-rich countries are politically unstable. This situation indicates that the future of the world energy market will fluctuate. The major geostrategic conflicts will occur between China and the United States. Energy security and seeking a new market for China, one of the world's economic leaders, is a matter of survival. While Washington is not interested in China’s stepping up its position in the oil and gas market, it needs to use political and economic leverage to prevent Chinese oil companies from entering the market as much as possible.
I think the analysis of the Russian elite is correct. Today, China’s dependence on oil imports has exceeded 50%, and this proportion will continue to increase. Therefore, the focus of attention of the Chinese oil industry will have to shift: Reserve exploration and oilfield development will increasingly shift from domestic to Overseas, the efficiency of the company's operations will be more tested in the competition with foreign counterparts, and the management methods will also be more from the "administrative management" to the "corporate governance" of market behavior. The company's effectiveness will be gradually transferred from the superior to the market. Identity. Are we ready for this? I think our transformation has only just begun, and this change is not easy.
Facing international counterparts The Chinese oil industry system originated in the Soviet Union in the 1950s. At the time, the “oil companies” under the highly planned economy had three basic characteristics: a geographic boundary (geological boundary of oil field basins); and oil and gas production as the center; an independent small society. This feature has resulted in "demand and no market" for engineering and technical services, "priority in employment and efficiency," and "executive coordination to squeeze technological competition." Under the traditional planned economy system, this approach has become a matter of course. With the acceleration of globalization and the dramatic changes in the world energy market, CNPC's market is no longer confined to the domestic market. Enterprises are no longer just executive units of executive directives. They will face more and more international counterparts. Competition and challenges.
Regardless of market share, technology, and efficiency, the US oil industry is still the world's largest, far ahead of other countries. The competitiveness of American oil companies is mainly derived from the oil market system of "full competition, efficiency first, survival of the fittest, and independence of entry and exit." In a completely competitive market, in the face of powerful competitors, we must emancipate our minds, be good at learning, deepen reforms, and be proactive and enterprising in order to bear the heavy responsibility that history has given us. The Russian model is no longer valid, and the model of the United States is difficult to duplicate. Therefore, China's oil industry reform and development can only be unshakeable and unswervingly strive to build a brand new Chinese model.

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