China Petroleum & Chemical Corporation

(Sinopec Corp.)

This Study was conducted by

KIRAN THACHARATH

Sap Id :50093804

MBA OIL AND GAS MANAGEMENT

INTRODUCTION
China Petroleum & Chemical Corporation (Sinopec Corp.) was founded on February 25, 2000, by China
Petrochemical Corporation (Sinopec Group), in accordance with the People's Republic of China's
Company Law. Sinopec Corp. is a publicly traded business with a total of 121.1 billion shares, 95.6
billion of which are domestic A shares and 25.5 billion of which are foreign H shares, as of the end of
2017. The corporation is a large-scale Chinese oil and gas producer with integrated upstream, midstream,
and downstream activities, as well as strong oil and petrochemical core businesses and a comprehensive
marketing network.

Sinopec Corp.’s large scale integrated energy and chemical upstream, midstream and downstream
operations include (1) the exploration and production, pipeline transportation and sale of petroleum and
natural gas; (2) the production, sale, storage and transportation of refinery products, petrochemical
products, coal chemical products, synthetic fibre, and other chemical products; (3) the import and export,
including an import and export agency business, of petroleum, natural gas, petroleum products,
petrochemical and chemical products, and other commodities and technologies; (4) and research,
development and application of technologies and information. In terms of refining capacity the company
ranks 1st in China as the largest supplier of refined oil products with its well-developed refined oil
products sales network. Additionally, in terms of ethylene production capacity the company ranks 1st in
China with its well-established marketing network for chemical products.

Sinopec Corp. has a standardised corporate governance structure that includes a centralised decision-
making management system, delegated authority at various levels, and specialised business units that
handle business activities. It has over a hundred subsidiaries and branches, as well as wholly-owned,
equity-holding, and equity-sharing businesses. As a multinational energy and chemical company with
relatively strong international competitiveness, the company strives to implement resource, market,
integration, and internationalisation strategies with a greater emphasis on science, technology, and
management expertise, as well as employee quality improvement.
 Table of Contents
Table of Contents
Overview of the Company and its Businesses
Company Overview(ownership,structure&management)
Business Overview
Principle Businesses(working areas and competition)
Exploration & Oil Production
Refining & Sales
Future projects and strategies
Company History
Overview of the Country and Industry Context
Overview of the Country
History of Chinese Oil Companies
The central government and self-reliance (1950-1977)
Breakdown and corporatization: first reform (1978-1991)
Decentralization: 2nd reform (1992-2003)
Government institution and NOCs: a move to recentralization (2003-2010)
Company Vision, Goals, and Attitudes
Mission
Vision
Approach
Acquisition Methods Used by the Company
Learning and Catch-up Undertaken by the Company
The Structure of Market Governance in China
The Reorganization of Sinopec
Channels of Technology Transfer
National Policies Affecting Capability-Building of the Company
Important Learnings and Lessons for Philippine Companies
Key Learnings
Recommendations(Suggestion for improvement)
I.Overview of the Company and its Businesses

Company Overview
China Petroleum & Chemical Corporation (Sinopec Corp.) was founded on February 25, 2000, by
China Petrochemical Corporation (Sinopec Group), in accordance with the People's Republic of China's
Company Law. Sinopec Corp. is a publicly traded business with a total of 121.1 billion shares, 95.6
billion of which are domestic A shares and 25.5 billion of which are foreign H shares, as of the end of
2017. The corporation is a large-scale Chinese oil and gas producer with integrated upstream,
midstream, and downstream activities, as well as strong oil and petrochemical core businesses and a
comprehensive marketing network.
Sinopec Corp.’s large scale integrated energy and chemical upstream, midstream and downstream
operations include (1) the exploration and production, pipeline transportation and sale of petroleum and
natural gas; (2) the production, sale, storage and transportation of refinery products, petrochemical
products, coal chemical products, synthetic fibre, and other chemical products; (3) the import and
export, including an import and export agency business, of petroleum, natural gas, petroleum products,
petrochemical and chemical products, and other commodities and technologies; (4) and research,
development and application of technologies and information. In terms of refining capacity the
company ranks 1st in China as the largest supplier of refined oil products with its well-developed
refined oil products sales network. Additionally, in terms of ethylene production capacity the company
ranks 1st in China with its well-established marketing network for chemical products.
Sinopec Corp. has a standardised corporate governance structure that includes a centralised decision-
making management system, delegated authority at various levels, and specialised business units that
handle business activities. It has over a hundred subsidiaries and branches, as well as wholly-owned,
equity-holding, and equity-sharing businesses. As a multinational energy and chemical company with
relatively strong international competitiveness, the company strives to implement resource, market,
integration, and internationalisation strategies with a greater emphasis on science, technology, and
management expertise, as well as employee quality improvement.

Business Overview
Exploration and oil production, refining and sales, chemical, research and development,
overseas trade and technological collaboration, environment and safety, and IT application are
all part of Sinopec Corp.'s massive integrated corporate operations. The energy and chemical
operations of Sinopec Corp. are depicted in the flow chart below.
 Figure 1. Sinopec Corp. Operations Flow Chart
Source: http://www.sinopec.com/listco/En/about_sinopec/our_business/

Sinopec Corp. is China's largest energy and petrochemical company, as well as the country's largest
refiner and distributor of gasoline, diesel, jet fuel, and most other major refined products, as well as the
country's second-largest producer of crude oil and natural gas, with production sites in various oil and
gas fields, as well as refineries and petrochemical plants, as shown below.

Figure 2. Sinopec Corp. Production Sites

Source: http://www.sinopec.com/listco/En/about_sinopec/our_business/

Principle Businesses /Working areas

1. Exploration & Oil Production

Sinopec Corp., with 12 oil and gas subsidiaries, is China's second largest oil and gas producer. A team
of technical professionals with vast experience in oil and gas exploration and development works for
the organisation. It is a leader in oilfield exploration, development, and extraction technologies,
including 3D seismic, tertiary oil recovery, optimum and fast drilling, complex structure wells drilling,
including ultra deep well drilling for paleozoic carbonate reservoirs, and multistage fracturing
technology for horizontal wells in tight oil and gas formations. The flow of Sinopec Corp's exploration
and production division is depicted in the diagram.
 Figure 3: Sinopec Corp. Business Flow of Exploration and Production (E&P) Segment
Source: http://www.sinopec.com/listco/En/about_sinopec/our_business/

2. Refining & Sales

Sinopec Corp. is China's largest petroleum refiner and producer of oil products, as well as the world's
second largest. Its refineries are strategically positioned in China's most economically vibrant regions,
with easy access to transportation and strong market demand. Gasoline, kerosene, diesel, lubricating oil,
and other petroleum products are produced by Sinopec Corp. It boasts a diverse range of processing
facilities as a result of years of self-development on technologies that are up to date with international
developments. In refining, R&D, engineering, and construction, the company has a strong and skilled
workforce. RFCC, catalytic reforming, high-pressure hydrocracking, medium-pressure hydrocracking,
hydrofining, residual hydro and lube oil hydrotreating and reforming technologies, as well as relevant
catalyst development and commercialization capabilities, are among the company's core refining
technologies. The flow of Sinopec Corp's refining business is depicted in the diagram.

Figure 4: Sinopec Corp. Refining Segment Flow Chart

Source: http://www.sinopec.com/listco/En/about_sinopec/our_business/

3. Chemical Segment
Sinopec Corp. is China's largest petrochemical manufacturer and distributor, with petrochemical
production sites in China's eastern, central, and southern regions, all of which are experiencing rapid
economic expansion and significant market demand. Intermediates, synthetic resin, synthetic fibre
monomers and polymers, synthetic fibre, synthetic rubber, and chemical fertiliser are among the
petrochemical products produced and distributed by the company. Petrochemical manufacturing is
closely linked to Sinopec's refining operations, with chemical feedstock sourced primarily from Sinopec
refineries. The company has 13 ethylene plants, 30 synthetic resin plants, 5 synthetic rubber plants, and
15 synthetic fibre monomers and polymers factories as of the end of 2011. The majority of the
company's petrochemical products are sold in the United States. The flow of Sinopec Corp's chemical
section is depicted in the diagram.

Figure 5: Sinopec Corp. Chemical Segment Flow Chart

Source: http://www.sinopec.com/listco/En/about_sinopec/our_business/

Company History

February 28, 2000 China Petrochemical Corporation (Sinopec

Group) incorporated China Petroleum &
Chemical
Corporation (Sinopec Corp.), as the sole
initiator.
October 18, 2000 Sinopec Corp. made a successful global IPO at
Hong Kong, New York and London Stock
Exchanges. The company’s total issued shares
as of 2000 is 16.78 billion H shares (including
ADRs in the US).
July 16, 2001 Sinopec Corp. issued 2.8 billion A shares in
the PRC market on July 16, 2001. Sinopec
Corp. publicly listed the company in the
Shanghai Stock
Exchange on August 8, 2001.
August 24, 2001 China's New Star Petroleum Company was
acquired by Sinopec Corp.
December 31, 2004 Chemical assets, catalyst assets and service
 stations from Sinopec Group was acquired by
Sinopec Corp. then sold down-hole operation
assets as a swap.
October 10, 2006 Implementation of reform on share-split for A-
share.
October 11, 2006 Sinopec Corp. injected capital into Hainan
Petrochemical Co., Ltd. to increase its
registered capital. Which gave Sinopec Corp.
75% of the equity interests in Hainan
Petrochemical Co., Ltd.
December 31, 2006 The oil production assets of Shengli Petroleum
Administration Bureau was acquired by
Sinopec
Corp. from Sinopec Group.
April 17, 2007 Issuance of HK$11.7 billion convertible bonds
overseas.
December 31, 2007 Five refineries including Zhanjiang Dongxing
was acquired by Sinopec Corp. from Sinopec
Group.
February 20, 2008 Sinopec Corp. issued RMB30 billion
convertible bonds with warrants in PRC
market on February 20, 2008. Warrants went
public on Shanghai Stock
Exchange on March 4, 2008.
Table 1: Sinopec Corp. History
Source: http://www.sinopec.com/listco/En/about_sinopec/our_company/our_history/
PESTLE ANALYSIS
A PESTLE analysis, according to Bandinelli & Gamberi (2011), is a stage or framework that advertisers
use to investigate and monitor macro-environmental elements that affect a company. China is the most
important and rapidly rising country in the world, with a strong economy and a large number of firms in
all sectors. It has demonstrated a strong power that is supporting its business all over the world, and its
products are regarded as sensible.

Political
Epstein & Buhovac (2014) claim that China has a robust political structure capable of producing its
economy. New techniques are being discussed in their congress, and these formal and pleasant
procedures are assisting the economy in becoming definitely more grounded. It has the proper technique
for the financial expert's aggregate in various current divisions, and the government is also focusing on
the movement of internet business. The industrial sector has strong political clout, which can bolster its
economies and boost its competitiveness, and strict controls can keep it on track for progress and success.

Economic
China's economy has seen a mind-boggling change rate in GDP during the last five years, and the
country can continue to progress at its current rate. It has a high rate of additional sponsorships, a large
number of skilled specialists, and a large charging business, all of which contribute to its success (Gupta,
2013). The firm created the "thirteenth Five-Year Plan" template for legal work and the "seventh Five-
Year Plan" law advancement plan in order to drive legal progress forward. It implemented a door-
keeping tool for legal audits of significant choices, source mediation, and process interest in legal work,
in order to provide legal administration assistance for corporate change and genuine activity.

Social
According to Ho (2014), as China's demographics change, the social component plays an increasingly
important role. For example, when the population grows, age-allocation shifts, affecting social cases and
social prestige. Family size and social behaviours have a significant impact on how people make
decisions. Purchaser lifestyles, preparation, religion, and resettlement are some of the other social
sectors. Sinopec's corporate culture embodies the spirit of bolstering the petrochemical sector, as well as
noble traditions such as hard labour, meticulousness, honesty, loyalty, and commitment.

Technological
There are a few technological elements that are concerned with the introduction of new things, the
purchase of new systems, new age innovation, and new distribution strategies such as the web and
broadcast communications. China must address the difficulties since it lacks a secure online payment
method, exposing Chinese purchasers to a high level of exposure and requiring a lengthy introduction. It
was also discovered that Chinese marketplaces have a low credit entry rate, despite the fact that credit is
widely employed around the world as a powerful and speedy instalment approach (Inkpen & Moffett,
2011).
SINOPEC- SWOT ANALYSIS

Strengths of Sinopec – Internal Strategic Factors

Sinopec, being one of the industry's leading corporations, possesses a number of advantages that enable it
to prosper in the marketplace. These advantages not only help it maintain market share in existing areas,
but also help it break into new ones. According to significant research conducted by Fern Fort
University, Sinopec's strengths include:

 Its Go To Market techniques for its products have been extremely successful.
 High customer satisfaction - the company has been able to attain a high level of
customer satisfaction among current customers and good brand equity among
potential consumers thanks to its specialised customer relationship management
department.
 Sinopec's products are now more consistent in quality thanks to automation, which
has allowed the corporation to scale up and down in response to market demand.
 Successful training and learning programmes have resulted in a highly competent
workforce. Sinopec devotes significant resources to staff training and development,
resulting in a team that is not only highly competent but also driven to attain greater
success.
 Solid Returns on Capital Investment - Sinopec has a good track record of completing
new projects and generating good returns on capital expenditure by establishing new
revenue streams.
 Strong dealer community - It has fostered a culture among distributors and dealers in
which dealers not only market the company's products, but also spend in educating
salespeople to explain to customers how they may get the most out of the items.

 Excellent Free Cash Flow - Sinopec has strong free cash flows, which give the
corporation the resources to invest in new projects.
 Product innovation is a successful track record of developing new products.

Weakness of Sinopec – Internal Strategic Factors

Weaknesses are areas in which Sinopec can improve. Strategy is about making decisions, and
weaknesses are areas where a corporation can strengthen its competitive advantage and strategic posture
by applying SWOT analysis.

 Financial planning is ineffective and ineffective. The current asset ratio and liquid
asset ratios indicate that the corporation can make better use of its cash than it is now.
 Sinopec has a lower profitability ratio and a lower Net Contribution Percentage than
the industry average.
 There are some gaps in the company's product line. This scarcity of options may
allow a new competitor to get a foothold in the market.
 In comparison to its competitors, it is not very adept at estimating product demand,
resulting in a higher proportion of missed chances. One of the reasons Sinopec's days
inventory is so high in comparison to its competitors is that the company isn't
particularly adept at estimating demand, so it ends up maintaining more inventory in-
house and in the channel.
  High staff attrition rate - compared to other companies in the industry, Sinopec has a
higher attrition rate and must spend significantly more on employee training and
development than its competitors.
 The product's marketing leaves a lot to be desired. Even if the product is a sales
success, its positioning and unique selling proposition are not well defined, which
could lead to competitor attacks in this segment.
 Integration of companies with distinct work cultures has not been very successful. As
previously said, while Sinopec is adept at integrating small businesses, it has had
some failures when it comes to merging businesses with distinct work cultures.

Opportunities for Sinopec – External Strategic Factors

As the market develops, competition advantages will dwindle, allowing Sinopec to strengthen its
competitiveness in comparison to its competitors.
 New environmental policies - The new possibilities will level the playing field for all
industry participants. It is a fantastic chance for Sinopec to capitalise on its
technological edge and win market share in a new product category.
 Customers acquired through the web channel – The corporation has put a lot of
money into the internet platform in the last few years. Sinopec has gained access to
additional sales channels as a result of its investment. In the coming years, the
corporation can capitalise on this opportunity by better understanding its customers
and meeting their demands through big data analytics.
 Lower inflation rate - A lower inflation rate brings more market stability and allows
Sinopec clients to obtain credit at a lower interest rate.
 New consumer behaviour trends may provide Sinopec with new market
opportunities. It gives the company a wonderful chance to diversify into new product
categories while also generating new revenue sources.
 The ability to invest in neighbouring product sectors is made possible by stable free
cash flow. With greater cash on hand, the corporation will be able to invest in new
technologies and product sectors. Sinopec should be able to expand into new product
categories as a result of this.
 After years of recession and a slow growth rate in the business, Sinopec sees an
opportunity to gain new customers and expand its market share.
 Sinopec can use the new technologies to implement a differentiated pricing strategy
in the new market. It will enable the firm to maintain its loyal customers with great
service and lure new customers through other value oriented propositions.

Threats Sinopec Facing - External Strategic Factors

In the medium to long term, new technologies produced by a competitor or market disruptor could
pose a severe danger to the sector.
 Given the diverse regulations and constant fluctuations in product standards in those areas, the
corporation may face lawsuits in numerous markets.
 The present physical infrastructure-driven supply chain paradigm may be threatened by changing
customer buying behaviour through internet channels.
 Intense competition - Over the last two years, stable profitability has expanded the number of
players in the business, putting downward pressure on both profitability and overall sales.
 The profitability of Sinopec could be jeopardised by rising raw material costs.
 Rising wage levels, particularly movements such as $15 an hour, and rising prices in China may
put considerable strain on Sinopec's profitability.
There isn't a consistent supply of innovative products – The corporation has developed a number of
goods throughout the years, but they are frequently in response to the development of other players.
FINANCIAL STATUS IN LAST 5 YEARS
FUTURE PROJECTS AND STRATEGIES

Sinopec unveils strategy to become China’s largest hydrogen-for-fuel producer by

2025
Sinopec, the world's largest oil refining company, has launched a multibillion-dollar plan to become the
region's largest generator of hydrogen for use as a transportation fuel by 2025.
Over the next four years, the corporation plans to invest $6.35 billion in the construction of 1,000
hydrogen refuelling stations across the country, with a total annual capacity of 200,000 tonnes.
It has constructed 20 stations so far, with another 60 in the planning and approval stages.
The facilities will be powered by renewable energy, with approximately 1 million tonnes of zero-
emission hydrogen fuel produced annually utilising 7,000 solar panels with a total producing capacity of
400 megawatts.
Following the release of Sinopec's interim half-year results, president Ma Yongsheng revealed plans to
construct the nation's largest supply chain for automotive hydrogen during a press conference this week.
The objective is a decade ahead of the country's 2060 goal of becoming carbon neutral.
With roughly 30,716 branded stores, Sinopec now possesses China's largest service station retail
network.
It absorbs roughly 25% of barrels delivered to its network from independent refineries and state-owned
peers, in addition to supply from its own refineries.
Carbon neutral goal
Sinopec's hydrogen refuelling infrastructure might help China, the world's greatest greenhouse gas
emitter, achieve its objective of being carbon neutral by 2060. China is currently the world's largest
greenhouse gas emitter, accounting for about 30% of global emissions.
Carbon neutrality entails eliminating as much carbon dioxide emissions as possible while offsetting the
remaining quantities.
For a country, this may imply using renewable energy sources like solar power instead of coal and
investing in carbon-absorbing programmes like reforestation.
President Xi Jinping made the bold remark in September at a virtual gathering of the United Nations
General Assembly, during which he also stated that China would aim for a carbon dioxide emissions
peak before 2030.
Initial attempts are said to have already been undercut at a regional level, largely due to provinces
continuing to construct high-energy, high-emissions projects, resulting in the country's emissions
growing at their quickest rate in more than a decade in the first quarter of 2021.
Hydrogen production
Sinopec intends to "intensify" its efforts to produce hydrogen from renewable sources, focusing on
hydrogen as a transportation fuel and green hydrogen for refining.
Mr Ma stated, "As a big energy corporation, we have gathered a wealth of knowledge and technological
advantages in hydrogen production and utilisation."
"Our nationwide gasoline station network will provide us a competitive advantage in hydrogen
distribution, and we will grab this historic chance to expand our hydrogen company."
A preliminary budget will cover hydrogen generation, purification, treatment, storage, and transportation,
as well as crucial material research and development.
Mr Ma stated, "By 2025, the target for the hydrogen supply chain and utilisation activities is to reduce
the emission of 10 million tonnes of carbon dioxide per year."
“To lower our carbon impact, we will convert our refineries and petrochemical factories to utilise green
hydrogen in their operations.”
Value-added products
Mr Ma stated that the company will seek ways to make Sinopec's business more competitive by
diversifying its value-added products and phasing out older units, as well as implementing processes that
would help reduce the company's environmental footprint.
To counteract an expected slowdown in demand for oil products, the world's largest refinery by capacity
will diversify into petrochemical goods, while continuing to invest in upstream projects in keeping with
the country's long-term energy security strategy.
Half-year results
Sinopec posted a $8.27 billion net profit for the first half of 2021 last week, owing to increased gasoline
consumption and a rebound in oil prices following the impact of COVID-19.
During the same period last year, the business lost $4.87 billion as the pandemic impacted fuel demand
and oil prices.
This year's intermediate earnings compares to a profit of $6.63 billion in the same period last year.
Following a rise in global oil prices and healthy demand for fuel and petrochemical goods, revenue for
the first six months increased 22.1 percent from last year's low base to $0.27 trillion.
Capital expenditure for the period came in at $12.26 billion, representing about 35% of Sinopec’s full-
year investment plan of $35.37 billion.

II.Overview of the Country and Industry Context

Overview of the Country

China is the world’s most populous country, with a continuous culture stretching back nearly 4,000
years. The People's Republic of China (PRC) was established in 1949 and deteriorated for over twenty
years under the cruel Communist guideline of Mao Zedong, the organizer of the People's Republic. The
initiative of Mao Zedong regulated merciless execution of a Communist vision of society prompting a
huge number of death during the Great Leap Forward. Mao's passing in 1976 had presented another
initiative and China started changing the post-Mao economy.

China's methodology for find the world's driving nations, post-Mao economy, was to execute modern
approaches that help the development of native firms to turn out to be worldwide serious organizations.
"Our country's situation in the global financial request will be generally controlled by the situation of our
country's huge undertakings and gatherings." - Wu Banguo, Chinese State Council, August 1998. China's
picked public group of huge firms included: Aviation Industries of China (AVIC) in the airplane business;
Sinopec and CNPC in oil and petrochemicals; Sanjiu, Dongbei, and Shandong Xinhua in drugs; Harbin,
Shanghai, and Dongfang in power hardware; Yiqi,Erqi, and Shanghai in vehicles; Shougang, Angang, and
Baogang in steel; and Datong, Yanzhou and Shenhua in coal mining.

The modern strategies that upheld China's worldwide monster companies include: levies, which actually
were huge in numerous areas toward the finish of the 1990s; non-tax boundaries, remembering limits for
admittance to homegrown showcasing channels, prerequisites for innovation move and to sub-agreement to
chose homegrown firms as the cost for market access; government acquisition strategy; government choice
of the accomplices for significant global joint ventures;preferential advances from state banks; and restricted
admittance to postings on worldwide financial exchanges.

China's obligation to build up universally serious enormous firms suffered as it arranged to enter the World
Trade Organization (WTO). State-possessed business were urged by the state to turn out to be
internationally cutthroat through open contributions, innovative work spending, rebuilding, and
consolidations and securing. China turned into an individual from the WTO on 11 December 2001, it
implied a notable achievement of China's profound incorporation into the world economy and business
framework. Nonetheless, at the place of passage into WTO, China's work to develop enormous worldwide
cutthroat firms matched with the worldwide business unrest. To endure the worldwide business upheaval,
the idea of the huge firms needed to change significantly.
Toward the beginning of the 21st century, China's driving undertakings have not yet achieved their
worldwide ability are still altogether behind worldwide pioneers because of the exceptional change in the
worldwide business framework. During the time, big time salary nations exploited state intercession in these
nations. The angles to the worldwide business unrest included 'progression of world exchange and capital
business sectors' the place where the worldwide driving firms have extraordinarily expanded their creation
capacities in quickly developing pieces of emerging nations and have rivaled each other for a portion of the
China's market which raised the country's unfamiliar direct venture (FDI) in 1988; 'unstable M&A fixation',
the world's most dangerous time of consolidations and obtaining where in for all intents and purposes each
area various concentrated worldwide makers have overwhelmed the world market; 'course impact' where
the center organizations and provider organizations encountered an extending collaboration from first level
providers into lower-level providers, making the serious scene considerably more trying for non-industrial
nations; the 'outside firm' where the limits of the huge enterprises have lessened and frameworks integrators
have infiltrated the worth chain both upstream and downstream, expanding the degree of control practiced
by the huge firms; and (5) 'strength of firms situated in cutting edge economies' the place where firms
situated in a little part of the total populace hold more benefit in the worldwide battleground than non-
industrial nations with enormous populace
History of Chinese Oil Companies The central government and self-reliance (1950-1977)
China's technique for track down the world's driving countries, post-Mao economy, was to execute
present day moves toward that help the advancement of local firms to end up being overall genuine
associations. "Our country's circumstance in the worldwide monetary solicitation will be by and
large constrained by the circumstance of our country's tremendous endeavors and social events." -
Wu Banguo, Chinese State Council, August 1998. China's picked public gathering of immense firms
included: Aviation Industries of China (AVIC) in the plane business; Sinopec and CNPC in oil and
petrochemicals; Sanjiu, Dongbei, and Shandong Xinhua in drugs; Harbin, Shanghai, and Dongfang
in power equipment; Yiqi,Erqi, and Shanghai in vehicles; Shougang, Angang, and Baogang in steel;
and Datong, Yanzhou and Shenhua in coal mining.
The cutting edge procedures that maintained China's overall beast organizations include: demands,
which really were colossal in various regions at the completion of the 1990s; non-charge limits,
recalling limits for permission to local displaying channels, essentials for development move and to
sub-consent to picked local firms as the expense for market access; government securing
methodology; government decision of the accessories for huge worldwide joint ventures;preferential
propels from state banks; and confined induction to postings on overall monetary trades.
China's obligation to build up universally serious enormous firms suffered as it arranged to enter the
World Trade Organization (WTO). State-possessed business were urged by the state to turn out to
be internationally cutthroat through open contributions, innovative work spending, rebuilding, and
consolidations and securing. China turned into an individual from the WTO on 11 December 2001,
it implied a notable achievement of China's profound incorporation into the world economy and
business framework. Nonetheless, at the place of passage into WTO, China's work to develop
enormous worldwide cutthroat firms matched with the worldwide business unrest. To endure the
worldwide business upheaval, the idea of the huge firms needed to change significantly.

Toward the beginning of the 21st century, China's driving undertakings have not yet achieved their
worldwide ability are still altogether behind worldwide pioneers because of the exceptional change
in the worldwide business framework. During the time, big time salary nations exploited state
intercession in these nations. The angles to the worldwide business unrest included (1) 'progression
of world exchange and capital business sectors' the place where the worldwide driving firms have
extraordinarily expanded their creation capacities in quickly developing pieces of emerging nations
and have rivaled each other for a portion of the China's market which raised the country's unfamiliar
direct venture (FDI) in 1988; (2) 'unstable M&A fixation', the world's most dangerous time of
consolidations and obtaining where in for all intents and purposes each area various concentrated
worldwide makers have overwhelmed the world market; (3) 'course impact' where the center
organizations and provider organizations encountered an extending collaboration from first level
providers into lower-level providers, making the serious scene considerably more trying for non-
industrial nations; (4) the 'outside firm' where the limits of the huge enterprises have lessened and
frameworks integrators have infiltrated the worth chain both upstream and downstream, expanding
the degree of control practiced by the huge firms; and (5) 'strength of firms situated in cutting edge
economies' the place where firms situated in a little part of the total populace hold more benefit in
the worldwide battleground than non-industrial nations with enormous populace.

Breakdown and corporatization: first reform (1978-1991)

In 1978, the Ministry of Petroleum Industry was re-established and became a separate
body from the Ministry of Chemical Industry, which was responsible for the downstream
segment of the oil industry. By 1980, the first contracts for exploration and development of
Bohai Gulf and Beibu Gulf were signed between the Chinese Petroleum Corporation under the
MPI administration, Japan-China Oil Development Company and the French national oil
company, Total. To raise funds, ensure stability in existing oil fields and to further oil
exploration, the government enabled the MPI to export oil and incur revenue from the
international market. Under the system, the MPI was directly contracted with the government to
 produce 100 million tons of oil, allotting 94.5% of actual oil output to the state. The government
further permitted the MPI to contract with local petroleum administrative bureaus, allowing them
to retain the revenue gained from excess production above the agreed target. Thus, in 1981 alone,
the petroleum industry raised RMB 600 million in revenue, 25% of the RMB 1.7 billion invested
by the government in the oil sector, proof that development with Chinese characteristics was
successfully initiated in the petroleum industry. The Ministry of Petroleum Industry was
restructured in 1988 to form the China National Petroleum Industry.1

Decentralization: 2nd reform (1992-2003)

Close by corporate rebuilding, the petrol organization was decentralized when the Ministry of
Petroleum Industry was annulled in 1993 and its managerial capacities moved to the NOCs. In 1998,
the State Bureau of Petroleum and Chemical Industry (SBPCI) was set up by the State Council under
the State Economic and Trade Commission (SETC) to accept the managerial capacities given to
CNPC, CNOOC and Sinopec during the 1993 changes. The decentralization of the petrol business
has given generous independence to NOCs and weakened the focal government's administrative
control. Consequently, while the state's petrol authoritative control loses its order and control
authority over NOCs, the NOCs thusly were acquiring concentrated force, bringing together center
interests of the auxiliaries and the parent organizations. Following the disappointment of SBPCI, the
succeeding offices framed by the State Council to manage the oil business either needed political
clout or labor. Thus, to additionally rebuild the oil area, the State Council annulled SBPCI in 2001
supplanting it with China Petroleum and Chemical Industry Association. In this manner with the
approaching rivalry and need for vertical mix inside NOCs, the focal government provided a
significant rebuilding of the oil and petrochemical industry. Additionally, with the WTO
participation, the Chinese petrol market will be opened for rivalry to global oil organizations (IOCs)
that offset Chinese NOCs in experience, aptitude and assets in investigation and improvement. The
second flood of changes following Deng Xiaoping's southern visit in 1992, marks the focal
government's move in progressing the Chinese economy from customary intending to a "communist
market economy". In November 1993, the Third Plenary Session of the CCP Central Committee
embraced the archive on the "Choice Concerning the Establishment of a Socialist Market Economic
Government institution and NOCs: a move to recentralization (2003-2010)
To fortify and combine government authority over the petrol business in China, the State Council
set up the National Energy Leading Group in 2005 under the administration of Premier Wen Jiao
Bao and NDRC administrator Ma Kai. Of the resistance from the NDRC and the NOCs, the Energy
Bureau was rather elevated to a bad habit ecclesiastical position and renamed the National Energy
Administration. While regulatory infighting described the public authority's ability to control the
petrol business, the NOCs were acquiring political impact in approach making, petrol valuing,
creation and organization. The National Energy Commission was set up in 2010 as a super service
entrusted to create China's energy improvement procedure, audit issues of energy security and
advancement, and arrange homegrown energy investigation and global energy collaboration. As the
public authority attempts to employ NOCs to seek after its political and monetary interests the
NOCs are utilizing its political and financial clout for its own business gains.

III. Company Vision, Goals, and Attitudes

Mission
The goal and reason for the existence of Sinopec Corp. is summarized in its corporate mission.

1
“ We strive to help people achieve their aspirations for a better life by providing society with cutting-
edge technologies, premium products and quality services. We will continue our path towards green
and low-carbon sustainable development. Through our production methods, we aim to transform our
practices and shape the industry structure so that they help conserve resources and protect the
environment. We aim to grow our company together with our stakeholders and strive to ensure that our
success is beneficial to all.” 2
Vision
Sinopec Corp.’s vision is to be a world-leading energy and chemical company. The company
incorporates a long-term development plan that conditions the growth targets and blueprints of the
company. Sinopec is committed to these four (4) aspects in actualizing its corporate vision:3

1. Being sustainable. It implements the development strategies of value-oriented,

innovation-driven, resources-optimized, open cooperation, green and low carbon growth.
Adjusting itself to the new business environment, Sinopec speeds up its transformation
and restructuring to improve effectiveness and quality of products so as to sustain its
profitability and competitiveness in business.

2. Bringing benefits to all. It prioritizes technology and puts people first in providing high
quality products, technologies and services. It endeavors to be a responsible and
respectable company to its employees, clients, shareholders, the general public as well as
the people in the host countries of its business operation.
3. Being green and highly energy-efficient. With its strength in the core business of energy
and chemicals, Sinopec endeavors to explore the new energies of shale gas, geothermal
energy and biomass. It advances the technologies in green and low-carbon energy,
environment-friendly new materials and the clean use of coal.

4. Being a leader. Being a leader is not only in business scale, but also in the quality of
products, efficiency, corporate culture and image, international competitiveness, and
market-oriented operations. Benchmarking these world leading standards, Sinopec is
making unremitting efforts to become a world leading company with high-efficiency
governance, leading corporate culture, advanced market-oriented and international
operations as well as leading technologies, talents and brand.

Approach to Learning and Catch-up

Sinopec Corp's. way to deal with mechanical learning and make up for lost time is clear in the organization's
innovative advancement procedure. The organization zeroed in on advancing and coordinating its
innovative capacities in crucial examination, application research and mechanical advancement to help its
center business improvement.

Through its technique, the organization had the option to make mechanical advances in investigation and
creation; ace the world's high level of the entire interaction refining innovation; and speed up the
development on coordination of petrochemical advances. Achievement rules incorporates dominating and
possessing of self-created progressed petrochemical advances. The achievement drivers of these mechanical
advancements incorporate 20 academicians of China Academy of Science and China Academy of

2
3
Engineering, 25,000 full-time R&D experts, and the 35% of the complete workers with a Master certificate
or Doctorate.

Further, the mechanical learning of Sinopec Corp. prompted the development of it's mechanical capacities
and intensity in the improvement of new advances in front of others. The organization centers around the
market needs in seeking after separated and high worth added items effectively fostering the items and
licenses. Before the finish of 2010, Sinopec Corp. has applied an aggregate of 10587 licenses were
conceded in which 742 were allowed abroad.

Table 2. Sinopec Corp. Patent Granted Over the Years

Source: http://www.sinopec.com/listco/En/about_sinopec/our_business/research_development/

IV.Technology Acquisition Methods Used by the Company

John H. Dunning fostered an incorporated system of global hypotheses that help the business
need for FDI. As per his "diverse hypothesis", the critical determinants of FDI are: (1)
possession explicit benefits, (2) area explicit benefits, and (3) disguise explicit benefits.
Notwithstanding these impetuses, Dunning additionally summed up the four inspirations of a
firm going through FDI. These four thought processes include: (1) asset looking for FDI to
access less expensive assets that are not accessible in the homegrown market, (2) key resource
looking for FDI to grow an association's business portfolio through the securing of resources,
(3) proficiency looking for FDI to upscale the nearby economy and increment efficiency, and
(4) market-chasing FDI to build piece of the pie and worldwide situating. Dunning's
hypothetical system on FDI is displayed beneath.

Figure 6: The eclectic theory framework developed by John H. Dunning.

 Source: http://www.diva-portal.org/smash/get/diva2:130481/FULLTEXT01.pdf

Unfamiliar Direct Investment (FDI) in the Chinese setting remembers unfamiliar ventures for the type of
money, elusive resources or values, and actual speculations through unfamiliar contributed undertakings,
collaboration among unfamiliar and homegrown financial backers, and the foundation of unfamiliar
endeavors in a host country. As a driver for financial development, FDI benefits a host country by
expanding human resources arrangement and efficiency, advancing products, and creating innovation
dispersion and overflows. The essential objective of China is to (1) reshape the worldwide worth chain, (2)
increment intensity, effectiveness, and the way of life of development of Chinese organizations through
global market openness, and (3) increment innovation moves.

Financial changes to oblige FDI began in 1979. The drive to move towards a more market-situated economy
permitted industry players to (1) draw in unfamiliar speculations towards China, and (2) build up unfamiliar
Chinese ventures abroad. Interests in cooking, designing, money and assembling enterprises prospered on
that very year, yet just at a limited scale. Before the finish of 1985, the Chinese market pulled in more
interests in handling and gathering, exchange, and assembling.

Further financial advancement occurred somewhere in the range of 1986 and 1992, driving the Chinese
market to take part in worldwide rivalry, however with the oversight of the state. Truth be told, the main
Chinese outward FDI in oil occurred in 1992 when the China National Petroleum Corporation (CNPC) put
resources into the North Twing Oilfield in Canada.

Sinopec put resources into Canadian oil sands through the foundation of SinoCanada, the organization's
auxiliary in Canada. SinoCanada shaped a joint endeavor with Canadian Synenco Energy Inc, and obtained
40% of offers worth 150 million Canadian dollars in an oil sands project in Alberta, Canada. In 2013,
Sinopec got 33% of U.S. firm Apache's Egypt business for around 3 billion US dollars, keeping an oil
creation yield of 350,000 barrels every day with an identical benefit of 620 million US dollars. The firm has
reinvested around 1 billion US dollars in Egypt in the course of the most recent three years, and is at present
in conversations to contribute billions to assist with fostering a petrochemical processing plant complex
south of the Suez Canal.

The sensational example of China's internal and outward venture binge builds development openings for
China-based organizations. This benefit changes the worldwide worth chain by stating the serious situation
of these organizations as predominant forces in the worldwide market field.

In general, China plans to (1) increment the homegrown yield of energy, and (2) acquire vital arrangements
with unfamiliar oil nations to tie down admittance to their oil assets, ideally by claiming the actual
wellspring of creation itself.

V.Technological Learning and Catch-up Undertaken by the Company

China has one of the world's biggest stores representing coal with the biggest portion of 334 billion tons,
raw petroleum with 180 million tons, and hydro-power with 401 billion kWH. Starting at 2005, the nation
was the primary biggest maker of coal and hydro-power on the planet, and 6th biggest maker of unrefined
petroleum around the world. Notwithstanding, because of the expanding nearby interest, homegrown stores
are not adequate to address the country's energy needs. In 2005 alone, utilization for standard coal topped to
2.22 billion tons against a stockpile of 2.06 billion tons.
The nation has turned to oil imports to make up for energy under supply. Oil is a more adaptable and
dependable wellspring of energy and not actually that intensely controlled of coal. As displayed on the
figure underneath, there has been a recognizable expansion in the peripheral hole between oil supply versus
request somewhere in the range of 1991 and 2013. The quickly developing beach front urban communities
in eastern China additionally import coal from Australia because of helpless framework from China's inside
making transports both expensive and tedious.

Figure 7: Oil supply versus demand growth from 1991 to 2013

In order to align with the 2020 Air Pollution Action Plan of China 14 in addressing environmental
threats within the country, especially in heavily crowded areas such as Beijing, the consumption and
utilization of Liquefied Natural Gas (LNG) is expected to grow at a rate of 7.8 annually in the next few
years.

The Structure of Market Governance in China

Chinese ventures are isolated into four classes: state-claimed endeavors; aggregate possessed undertakings;
individual-claimed ventures; and undertakings of other monetary sorts (for example joint-proprietorship
organizations, privately owned businesses, unfamiliar subsidized ventures, etc.).15 Sinopec

Gathering is a to a great extent state-claimed undertaking which includes a serious level of centralization.

Energy costs in China are set by the public authority, and costs fluctuate among areas and kind of
purchasers. 16 Due to its brought together market structure, oil organizations can't change costs dependent
on supply-request conditions without the immediate intercession of the state. State approaches impact the
presentation and tasks of energy organizations in the country. A unified administration structure sets the
bearing of energy improvements of these organizations too.

The financial progression somewhere in the range of 1979 and 1992 gave freedoms to Chinese oil makers to
take part in free contest on specific regions like investigation and creation, processing plant, and
assembling. The Chinese government likewise made moves to some degree direct its oil organizations
towards a market-situated evaluating technique in 2000. The incomplete market advancement in 2000
permitted Sinopec to change its offered costs yet just inside the 8% of the benchmark settlement cost.
Nonetheless, the state actually controlled most of value settlements on the lookout.

The Reorganization of Sinopec

China went through rebuilding in 1998 to change its energy area, especially the oil business. Sinopec, by
and large with China National Petroleum Corporation (CNPC) and China National Offshore Oil
Corporation, were rearranged to reflect the Western design of upward coordinated ventures.
Vertical combination might bring down the expense, or work on a company's capacity: (1) to discard yield
or to get supplies of some thing; or (2) to control the nature of information sources or of downstream
administrations (like client support); or (3) to oversee cost or amount hazard. 17
Sinopec Group was initially occupied with downstream oil and gas creation. During the 1998 change, the
organization turned out to be upward coordinated through the circulation of its resources across the whole
worth chain from upstream to downstream. The organization was assigned to cover the entire cycles in the
energy esteem chain, and to zero in on oil creation inside the South and East areas of China. The new
organization structure likewise detached the organization's center organizations from its non-center
organizations (for example authoritative capacities, designing and specialized administrations, and so on)

Channels of Technology Transfer

Sinopec is subject to homegrown stores for oil and gas creation. Its commitment towards the most
optimized plan of attack investigation and abuse of normal assets, like oil or petroleum gas, and expanded
direct speculations to tie down public and unfamiliar asset supplies are inspirations to address financial
requirements because of the minor holes between energy market interest.
Studies recommend that a portion of China's oil sources stayed undiscovered, either in light of lacking
advancements to take advantage of these sources or the expense of using accessible advances is costly.
Deferrals in oil imports additionally represented a danger towards provincial and public financial
development. Accordingly, the fundamental target of the organization's support in FDI was both asset
chasing and resource chasing. Its expanded unfamiliar ventures likewise encouraged a climate to work with
innovation moves through innovation overflows in oil creation, innovative work, and worldwide exchange.

Presently, Sinopec has innovative work regions in (1) investigation and creation advances, (2) refining
advances, (3) substance advances, and (4) utility designing advances. Its advanced change and
industrialization center around brilliant assembling underway and activity, sustaining its internet business
stage and improving its business administration model, and incorporating a common activity and the
executives stage.
 Figure 8: The current structure of Sinopec’s integration of information and industrialization
Source: http://www.sinopecgroup.com/group/en/technologicalinnovation/Technological/

VI.National Policies Affecting Capability-Building of the Company

China is bountiful with coal saves second to the United States however inadequately invested with oil and
gas saves. The nation was once the world's biggest maker and purchaser of coal as it fundamentally uses this
asset in energy creation and utilization. In 1990s onwards, oil and gas utilization of China expanded
significantly at a yearly pace of 5.5 to 5.7 percent, making it the third biggest oil buyer of oil in the year
2000s after United States and Japan (Nolan and Zhang, 2002). China and its oil supply security actually
stayed a significant issue for its administration.

China adapted to the worldwide setting of oil industry through rebuilding programs that expect to foster
universally serious huge oil and petrochemical organizations. The rearrangement of oil organizations
completed three destinations: First, organization resources of CNPC and Sinopec were disseminated across
the entire worth chain, both in upstream and downstream creation, to make upward coordinated oil and
petrochemical organizations. Sinopec, which in the past zeroed in on downstream creation, has been
engaged with upstream creation too. Second, the managerial elements of CNPC and Sinopec were isolated
from their business the executives capacities. The State Petroleum and Chemical Industry Bureau under the
State Economic and Trade Commission was framed to assume control over the said firms (Nolan and
Zhang, 2002). What's more, third, the combination of China with the worldwide oil industry through China's
raw petroleum which was fixed to the Singapore Freight ready (FOB) costs. In accordance with the
rebuilding, the State Development and Planning Commission (SDPC) distributes a month to month
benchmark of raw petroleum cost dependent on the normal Singapore FOB costs. CNPC and Sinopec
arrange an exceptional comparative with the benchmark value (Nolan and Zhang, 2002).

The Chinese government gave help to petrochemical organizations to be important for the worldwide
buoyancy. Sinopec, alongside CNPC, had a key change as far as business and construction through isolating
its center organizations like oil and gas investigation and advancement, stockpiling and transportation,
refining and advertising, and petrochemicals to non-center organizations including ventures that ran
designing, specialized, and framework benefits just as friendly capacities like schools and medical clinics
(Nolan and Zhang, 2002).
Since public oil organizations (NOCs, for example, CNPC and Sinopec are greater part state-possessed,
explicitly by the State Assets Supervision and Administration Commission (SASAC), China has an
extraordinary authority over the NOCs through institutional instruments like Central Organization
Department (COD) and SASAC. Through state strategies, NOCs including Sinopec had the option to get up
to speed and be important for the worldwide market.

State Assets Supervision and Administration Commission

SASAC assumes control over the proprietorship and control of offers and resources of state-claimed
ventures (SOEs) by isolating government organization from big business the board just as possession from
the executives in agreement to Trade Policy Review in 2006. The SASAC presently holds 116 focal SOEs
going from broadcast communications, aircrafts and transportation, car, energy, and mineral ventures
incorporating NOCs with an aggregate of 3.7 trillion US dollars in resources (Francisco, 2013).
The primary need of the commission is to guarantee proficient organization execution through the control of
its directorate and setting on the organization's principle procedure plan (Szamosszegi and Kyle, 2012). This
additionally holds administrative authority over changes and rebuilding of SOEs (Francisco, 2013).
SASAC controls pretty much every part of NOCs as far as venture methodologies, monetary arranging,
corporate turn of events, and resource and value the executives. The commission additionally executes
administrative controls over the pay portion, removal of significant resources, and rebuilding plans
including consolidations and obtaining. Underneath figure shows how the CCP along with its NOCs are
organized.

Fig. 9. Administrative Control of NOCs

Central Organization Department (COD)

The focal association division expects the authority over the chief arrangement inside the CCP including
SASAC. For this situation, Sinopec is actually under the CCP particularly on the leader post which are
affirmed and carried out by the division. The CCP accepts energy area as its vital systems in keeping up
with its dependability that is the reason it fixes its command over leaders in the area. Alongside other state-
possessed endeavors, the general control and assignments of senior places of public oil organizations are
additionally under COD. This shows how the state or CCP have an incredible impact over the NOCs and
how it is overseen by the public authority.
 Key Learnings
Sinopec, being one of the industry's leading corporations, possesses a number of advantages that
enable it to prosper in the marketplace. These advantages not only help it maintain market share in
existing areas, but also help it break into new ones. According to significant research conducted by
Fern Fort University, Sinopec's strengths include:

 Its Go To Market techniques for its products have been extremely successful.
 High customer satisfaction - the company has been able to attain a high level of
customer satisfaction among current customers and good brand equity among
potential consumers thanks to its specialised customer relationship management
department.
 Sinopec's products are now more consistent in quality thanks to automation,
which has allowed the corporation to scale up and down in response to market
demand.
 Successful training and learning programmes have resulted in a highly competent
workforce. Sinopec devotes significant resources to staff training and
development, resulting in a team that is not only highly competent but also
driven to attain greater success.
 Solid Returns on Capital Investment - Sinopec has a good track record of
completing new projects and generating good returns on capital expenditure by
establishing new revenue streams.
 Strong dealer community - It has fostered a culture among distributors and
dealers in which dealers not only market the company's products, but also spend
in educating salespeople to explain to customers how they may get the most out
of the items.
 Excellent Free Cash Flow - Sinopec has strong free cash flows, which give the
corporation the resources to invest in new projects.
 Product innovation is a successful track record of developing new products.
 Joint Venture Agreements provide an opportunity for firms that lack the technical
and technological know-how in order to catch-up, especially in a capital-
intensive industry such as upstream oil.
 Outward Foreign Direct Investments can lead the way to market dominance
through possiblefirm acquisition. The downstream oil industry has numerous
examples of this and so, local firms should be aware of opportunities but wary of
the competition.
 The downstream oil industry is a market-dominated industry, and therefore
demands firms to be competitive. Firms that lack the ability to compete lose their
market share which result to firm acquisition.
 Government and policy play a key role in the effectivity of growing and
dominating a limited commodity such as the Oil Industry. It can support local
firms through protective policy strategies, but only if the government has
majority control.

Recommendations/Suggestions for improvement

● As the market develops, competition advantages will dwindle,
allowing Sinopec to strengthen its competitiveness in comparison to its
competitors.
● New environmental policies - The new possibilities will level the
playing field for all industry participants. It is a fantastic chance for Sinopec to
 capitalise on its technological edge and win market share in a new product
category.
● Customers acquired through the web channel – The corporation has
put a lot of money into the internet platform in the last few years. Sinopec has
gained access to additional sales channels as a result of its investment. In the
coming years, the corporation can capitalise on this opportunity by better
understanding its customers and meeting their demands through big data
analytics.
● Lower inflation rate - A lower inflation rate brings more market
stability and allows Sinopec clients to obtain credit at a lower interest rate.
● New consumer behaviour trends may provide Sinopec with new
market opportunities. It gives the company a wonderful chance to diversify
into new product categories while also generating new revenue sources.
● The ability to invest in neighbouring product sectors is made
possible by stable free cash flow. With greater cash on hand, the corporation
will be able to invest in new technologies and product sectors. Sinopec should
be able to expand into new product categories as a result of this.
● After years of recession and a slow growth rate in the business,
Sinopec sees an opportunity to gain new customers and expand its market
share.
● Sinopec can use the new technologies to implement a differentiated
pricing strategy in the new market. It will enable the firm to maintain its loyal
customers with great service and lure new customers through other value
oriented propositions.
● Local Firms in the upstream industry should continue to conduct Joint
Venture Agreements but should also maximize the opportunity to acquire
the technology and technical expertise of their foreign counterparts.
● Local Firms, both private and public, and from upstream and downstream
industries, should engage in more Joint Venture Agreements to hasten the
diffusion of technology.
● Local firms that have strong marketing capabilities should conduct Outward
Foreign Direct Investments in order to learn different technologies, and
possibly acquire other firms that have certain technologies and processes
that the Philippines still does not have.
● The Philippine Government, as a stakeholder in NOCs, should consider the
possibility of re-centralizing the Oil Industry in order to support FDI and
JVs, to speed-up the catch-up of technologies, and to protect local firms
from dominant foreign competitors.
● The Department of Energy should continue to strengthen its Information
Technology and Management Services in order to create a policy-driven
environment for ICT, data and information management, and risk reduction
plans and programs.
● The government should continuously support the DOE on energy-related
policies. For example, the Energy Resiliency Policy aims to focus on risk
reduction management for uninterrupted delivery of energy supply towards
the consumers. It also aims to protect and secure energy-related facilities in
the country.