PetroChina may spin off its oil service business

China National Petroleum Corporation (hereinafter referred to as "China National Petroleum Corporation") may be planning a major reform with far-reaching impact
.
News from overseas shows that the company’s chairman Wang Yilin publicly stated the day before that the company is planning to spin off its oilfield services business
.
An insider in the CNPC system told reporters that this is indeed possible, but the specific plan has not yet been seen
.
Experts commented that this move may be a response to the liberalization of the upstream sector after the oil reform
.
It is reported that Wang Yilin made the above statement at the IHS Cambridge Energy Annual Meeting held in Houston, USA, but he did not provide a timetable and share split ratio
.
"President Wang did indeed go to the United States
.
" An insider of China National Petroleum Corporation confirmed to reporters yesterday
.
But he said that he has not heard the news that the group will spin off the oil service business.
“If it is true, this is a big thing
.
” He said that CNPC has always had eight major business segments, including engineering technical services and petroleum engineering.
The construction of these two major businesses belongs to the scope of oilfield services
.
These two pieces account for a relatively large proportion of PetroChina's overall business, and once they are separated, they will inevitably have a relatively large impact on the group
.
Another person familiar with the CNPC system told reporters that this is indeed possible, but the specific plan has not yet been seen
.
"After professional reorganization, PetroChina has formed five major drilling companies, Eastern Geophysical, CNPC Logging and other oil service companies, mainly serving oil companies
.
If further spin-offs are to be made in the future, in theory, these oil service companies should be completely separated.

"Dong Xiucheng, vice dean of the School of Business Administration of China University of Petroleum, said in an interview with a reporter from Shanghai Securities News that the biggest advantage of the separation of oil service business is that it can allow the domestic oil service field to form a real market
.
In his view, the three major oil service sectors should be separated and form an oil service market with foreign and private oil service companies
.
Only in this way will the strength of the oil service company be improved and costs reduced
.
"The biggest difference between PetroChina, Sinopec and CNOOC in the oil service sector is that the latter two oil service companies have already been listed
.
Therefore, it is not ruled out that PetroChina will take this opportunity to promote the listing of oil service companies
.
" Dong Xiucheng said
.
Nevertheless, the oil service companies of Sinopec and CNOOC are still within their respective groups
.
Dong Xiucheng believes that all reforms should be stripped away, but this is not the company's own final say
.
Internationally, oil service and engineering technology have long been a fully competitive industry, through competition to continuously improve the technical level of the industry, while reducing service costs
.
But for the three major state-owned oil companies whose oil service business accounts for about 80% of the domestic market share, their block exploration and development are “accustomed” to prioritizing their own oil service companies, which certainly hinders market competition and the upstream oil and gas market.
Open
.
"This is a bit like the relationship between real estate developers and construction engineering companies.
Oil companies are similar to real estate developers, and oil service companies are similar to builders.
The two sides should be in a fully competitive relationship
.
" Dong Xiucheng said
.
According to industry insiders, the oilfield services and engineering technology sectors are the three most densely populated fields
.
If this reform can be implemented smoothly, it will undoubtedly be very beneficial to improving the efficiency and operating efficiency of the three major oil companies
.
On the other hand, as the oil reform is imminent, it will also involve the liberalization of upstream businesses.
This objectively forces the central petroleum enterprises to accelerate their internal reforms, including the spin-off of the oil service business to enhance competitiveness
.