CNPC reorganizes into eight integrated service companies, seeking international market

By Maggie Cox, editorial coordinator

Surviving in a fluctuating market remains China National Petroleum Company’s (CNPC) main reason for reorganizing in 2008. Emerging with eight new drilling and service companies, CNPC’s oilfield service sector now comprises Greatwall, Bohai, Xibu, Daqing and Chuanqing Drilling Company, alongside three service companies that specialize in logging, offshore engineering, geophysics and seismic surveying.

“The purpose of this change is to enhance efficiency and competency in order to make all subsidiaries more marketable,” Qingli Yang, president of CNPC Technical Service Company, said. “We had many oilfields, and, in each oilfield, we had some people providing the service for each field. But now, since CNPC reorganized, the entire oilfield service sector, we can provide a more specialized service for all of these fields. The marketing mechanism results in higher resources and operating efficiency.”

Aware of its motto, “Number one in domestic, 1st class in world industry,” the company has been making adjustments to its industry approaches by focusing on speed, efficiency and crew competency.

“To help us survive this fluctuating environment, we chose speed and efficiency in order to deliver our services quicker and better, and focus more on results. This way we can get better economic results and increase our profit margin, not only for each company but for each crew,” Mr Yang said.

Crew competency also plays a major role in the reorganization, which can be seen in improved training processes and techniques, he said.

Approaching training at the corporate and subsidiary levels, the company is using motivation, recognition and identification to encourage employee improvement.

“The company will provide training during the whole procedure of the staff’s career. We then continue to provide them training opportunities to let them improve their skills,” Mr Yang said. “We recognize and select the specialists from the oilfield service sectors of CNPC and allow them provide support for all of the systems.”

HSE remains a priority for the company. Each of its 15 well control schools is required to simulate kicks, blowouts, LC, swabbing and more in training courses.

CNPC holds an HSE training conference at the corporate level every three months to review and ensure well control quality. In 2009, CNPC held a downhole operation well-control competition at the Dagang Oilfield, which gave employees a chance show off their skills to speed up the progress in all crews.

“Drilling, logging and downhole operations are high-risk operations worldwide,” Mr Yang said. “It’s the responsibility of the company to ensure the safety and happiness of the employee. This outcome derives from our efforts to popularize the HSE management system. It has laid a solid base for our improving HSE performance.”

In 2009, CNPC performed 240 underbalanced operations and drilled 505 horizontal wells. They are utilizing new equipment such as MWD, LWD, EMWD and vertical drilling during these operations, which are accessible by all eight drilling and service companies.

“We have the ability to produce the tools and equipment that are being utilized in the world, which are also being applied widely in China now,” Mr Yang said. “Now the technology we are utilizing focuses more on horizontal drilling, underbalanced drilling, snubbing unit application, which enable us to protect the reservoir better and to get higher production from each well.”

Mr Yang commented on the future of CNPC, saying that the company’s desire to venture into the international market and the preparations the company has taken to improve their industry techniques have made them ready to step into the global scene.

“Before, we spent more efforts within China, but recently, we are ready to go abroad and operate internationally, like many other international oil companies did in the last decade,” he said. “CNPC wants to follow their steps to take more opportunities to develop in the international market. We are ready to share our experiences with our clients and willing to become a reliable supplier in the global oilfield services market.”