Cnooc Case Study
CNOOC: BUILDING A WORLD-CLASS ENERGY COMPANY
CASE ANALYSIS
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Becoming a world-class energy company does have its privileges and requires a significant amount of commitment from a thriving leadership team. Fu Chengyu, the President of China National Offshore Oil Corporation joined the company over 30 years ago at its inception. He shared his vision of having a world -class energy company, by improving value creation capability, low-carbon competiveness, and sustainability. After Fu Chengyu was appointed President in 2003, the company experienced what some people would say “supernatural success”. The company developed from a domestic market to more than 20 countries and regions overseas, causing tremendous growth in revenues. By 2009, with revenues of 30.7 billion U.S dollars, the gross production increased by more than 500 times. (Bower, Dai, Shih Ta Chen 2012). Rather than becoming complacent, Mr. Fu had an even greater vision and wanted to discuss some key issues that would influence the next phase of development. Having already accomplished a great percentage of revenue from overseas markets, he also wanted to build a modern energy portfolio by not only stepping up the deepwater exploration of oil and gas resources, but also developing clean and low carbon energies. Expansion into the overseas market brought forth new issues and challenges. Since resource-rich countries had such strong hold on their natural assets, he questioned if they should rely more on joint ventures than on acquisitions to achieve overseas assets. (Bower, Dai, Shih Ta Chen 2012). He wanted to know how could CNOOC maintain it’s global vision, stay competitive and rely less on their sister company CNOOC Limited.
Energy Industry and the China Market: Problems the CNOOC Faces As it Goes Global Due to economic growth and development, global investment in renewable energy increased from $20 billion in 2004 to 120 billion in 2008. Throughout the substantial
CASE ANALYSIS
By
Becoming a world-class energy company does have its privileges and requires a significant amount of commitment from a thriving leadership team. Fu Chengyu, the President of China National Offshore Oil Corporation joined the company over 30 years ago at its inception. He shared his vision of having a world -class energy company, by improving value creation capability, low-carbon competiveness, and sustainability. After Fu Chengyu was appointed President in 2003, the company experienced what some people would say “supernatural success”. The company developed from a domestic market to more than 20 countries and regions overseas, causing tremendous growth in revenues. By 2009, with revenues of 30.7 billion U.S dollars, the gross production increased by more than 500 times. (Bower, Dai, Shih Ta Chen 2012). Rather than becoming complacent, Mr. Fu had an even greater vision and wanted to discuss some key issues that would influence the next phase of development. Having already accomplished a great percentage of revenue from overseas markets, he also wanted to build a modern energy portfolio by not only stepping up the deepwater exploration of oil and gas resources, but also developing clean and low carbon energies. Expansion into the overseas market brought forth new issues and challenges. Since resource-rich countries had such strong hold on their natural assets, he questioned if they should rely more on joint ventures than on acquisitions to achieve overseas assets. (Bower, Dai, Shih Ta Chen 2012). He wanted to know how could CNOOC maintain it’s global vision, stay competitive and rely less on their sister company CNOOC Limited.
Energy Industry and the China Market: Problems the CNOOC Faces As it Goes Global Due to economic growth and development, global investment in renewable energy increased from $20 billion in 2004 to 120 billion in 2008. Throughout the substantial