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PetroChina > About PetroChina > Business Strategy

Adhering to the missions of Energize, Harmonize and Realize, PetroChina is committed to the policy of steady development, and pushes the strategies of resources, markets, internationalization and innovation with the aim to build a world-class international energy company. The Company focuses on improving quality and efficiency, strives to optimize the two value chains of oil and gas, gives priority to oil and gas exploration and development, efficiently develops refinery and marketing, accelerates the development of natural gas and pipelines, and coordinates the development of international trade business. The Company implements six major initiatives: deepening reform, open for cooperation, technological innovation, talent pooling, corporate ruling by laws, and ensures safety throughout development, to shape a good company image, and improve the overall strength, international competitiveness and sustainable development ability of the Company, rewarding shareholders and society by achieving satisfactory performance.

The core to the principle of steady development is to continue making progress while ensuring stability and enhance quality and efficiency. The Company needs to actively adapt to the New Normal of economic development, coordinate the current and long-term development, maintain a balance among reform, development and stability, among scale expansion, speed and quality and efficiency, and between the Company’s interests and the interests of different stakeholders. The Company sticks to strengthening fundamentals, adjusting structure, fixing weakness, enhancing profitability and managing risks, and continues  enhancing the development momentum, vitality and competitiveness, so as to achieve a steady growth of production and sales volume and improved operating results with a stable and harmonious environment for development and steadily improved corporate image. These measures will help the Company move towards a more stable, healthy and sustainable development.

Business Objectives

PetroChina plans to achieve the business objective of building a world-class international energy company in two steps.

First step: a new level of making PetroChina a world-class international energy company by 2020. With scalability at a world-class level, the operating efficiency will steadily improve, business structure will be optimized, significant achievements in technological innovation will be made, an efficient corporate governance system will be put in place and the Company will achieve good results in safety and environment. At this stage, the achievements will be shared with all stakeholders, the Company brand will be well-known worldwide, and the operating performance and international competitiveness will reach the same level as international majors.

Second step: Build up a world-class international energy company by 2030. The Company will maintain a leading position in terms of scalability with operating performance among the best of international majors. The Company’s capacity to allocate resources globally will continue to grow with its core technology reaching the world top level. We will have a modern and international corporate governance system in place and management capabilities with staff quality and income further improved and international competitiveness and influence further enhanced, thus becoming a respectable enterprise worldwide.

The Company's Development Strategy

Faced with new trends and opportunities as well as new conflicts and challenges in the socio-economic development during “the 13th five-year plan period”, PetroChina must keep pace with the times and improve the development strategy while maintaining its strategic focus. Empowering the strategies: resources, markets and internationalization with new meanings and realizing new transformation, the Company must make innovation its core for overall development, make innovation the driving force for the development of the Company, and give play the leading role of technical innovation, to push forward all-around innovation, cultivate new impetus, explore new space, and gain new advantage for development.

Resources Strategy. Firstly, PetroChina will transform from scale-focused to more quality-focused, strengthen risk exploration and optimum evaluation to increase scalable and effective reserves, promote technological progress and management innovation to increase the recovery rate of old oil fields and effectively develop low-grade reserves. Secondly, the Company will shift its focus from conventional oil and gas resources to give equal importance on both conventional and unconventional oil and gas resources as well as various energy resources. Thirdly, the Company will obtain overseas resources by independent exploration, mergers and acquisitions, assets exchange and trading instead of trading and mergers and acquisitions mostly.

Marketing Strategy. Firstly, the Company will transform from guaranteed supply to marketing competition, enhance the sense of competition and service and improve marketing capabilities. Secondly, it will shift its focus from traditional regional markets to high-end and high-margin markets, optimize marketing networks, and expand share in high-efficiency market. Thirdly, the Company will transform its sales model from traditional to “Internet+”, to innovate marketing model. Fourthly, it will target the global market instead of being mainly focused on the domestic market, strive to explore international markets and allocate resources globally.

Internationalization Strategy. Firstly, instead of expanding purely its business in overseas markets, PetroChina will promote the internationalization of philosophy, management, technologies, standards and talents, improve the institutional mechanisms and processes to better meet international standards, and enhance the level of operations and management. Secondly, rather than promoting internationalization of a single segment or part of its businesses, the Company will push forward internationalization of all businesses company-wide, coordinate domestic and international, upstream and downstream business development to improve abilities of global business and capital operations. Thirdly, the Company will shift its focus from the scale expansion to the improvement of quality and profitability, selectively develop its businesses, strategically acquire and sell assets, to optimize the structure and layout of the assets.

Innovation strategy. Firstly, PetroChina will change the driving force of its development from investment to innovation, and create first-mover. Secondly, the Company will not only focus on technological innovation but also the all-round innovation covering philosophy, mechanisms, management, culture, business models, informatization as well as science and technology, to reinforce the Company’s new advantages in resources, technology and markets. Thirdly, instead of following and imitating peers, the Company will promote self-innovation, integrated innovation and re-innovation, focusing on building a batch of core technologies that are competitive worldwide. Fourthly, the Company will promote innovation among all staff instead of R&D personnel only, to form an environment in which the leading talents and the entire staff work together to drive innovation, and to make innovation part of the culture throughout the company.

Direction of Development

Give priority to the Exploration and Development business. The Exploration and Development business will ensure the survival of the Company, as well as its development and profits. It is the cornerstone of the Company’s core competitiveness and internationalization and must be given priority in development. It is vital to establish a global business philosophy, overall plan the development of Exploration and Development business domestically and abroad, optimize the allocation of resources, technology, human resource, capital, and other elements over a wider range and at a higher level, continuously reduce discovery and development costs, and strive to achieve simultaneous growth of oil and gas reserves, output and profitability.

Strengthen refining business and marketing with a focus on profitability. Refining & Chemicals and Marketing business is an important midstream business in the industry value chain for value creation. It is also a main revenue stream and an important channel to enhance brand value. Especially in the period of low oil prices, it is necessary to develop Refining & Chemicals and Marketing business effectively to continuously generate profits. In order to maximize the value of the entire industry chain, the Company guarantees its self-production, controls refining capacity, expands sales, increases export, and improves storage and transportation to promote the integrated development of production, refining, transportation, marketing, storage and trading, with its focus on both oil and gas resources and on both domestic and international markets.

Accelerate the development of the Natural Gas and Pipeline business. As the strategic and growing business of the Company, the Natural Gas and Pipeline business is a new growth driver during the period of low oil price. Therefore, the Company must accelerate the development of natural gas, and increase the natural gas output to offset the decrease in crude oil output. The Company adheres to the principles of being market-oriented, sales-focused and profit-centered, to guarantee self-production, adjust import, reinforce sales, expand sales terminals, and improve storage and transportation, to coordinate production, trade, storage, transportation, sales and peak shaving, as well as to maximize the value of natural gas business chain.

Coordinate the development of international trade business. As an effective way to realize global strategy and an important carrier for connecting domestic and overseas resources and markets, international trade helps ensure the effective supply of oil and gas and expand product exports. Based on the overall situation, the Company will optimize its structure, attach equal importance to import and export, strengthen the operation in high-end markets, enhance the ability to acquire global resources and markets, thus upgrading its international trade business.