Soft Launch of China Oil, Gas & Chemicals Centre of Excellence ("COC")
Oil and gas is a backbone of the China economy, contributing about 20% of the GDP. Moreover, oil prices are one of the most watched economic barometers for China's economy as it materially affects the performance of the economy as it is such a large input cost. Today, China is the number one crude oil and natural gas importer in the world. Managing this energy dependence has also transformed China into one of the top oil and gas producers.
Despite China's central role in the oil and gas business, it is a truly global industry. The global oil market has witnessed rollercoaster like changes ranging from Brent crude oil price highs of 112 USD/Barrel in 2012 to price crashes of 52 USD/Barrel in 2015. The lack of predictability is not expected to abate and as such large capital investments and operational performance are receiving unheard levels of scrutiny.
Fueled by environmental concerns the oil and gas industry is also wrestling with a strategy choice of shifting to cleaner energy sources while maximizing the value of their current investments. Additionally factors like geopolitical tensions have also weighed in to disrupt normal supply and demand, creating new trading relationships between nations and companies. Finally, while not limited to upstream oil and gas, China produces over 60% of the world's chemicals and since chemicals use oil as a major feedstock this sector is not spared from the above uncertainties. This is why the top chemical companies in the world are oil and gas companies.
Oil and gas companies are focusing on continuous improvements through new technologies and upholding capital discipline in order to maintain the profitability of their asset portfolios. China oil and gas companies, especially CNPC, Sinopec and CNOOC, have even more to deal with than global peers due to their additional complications contributed by size, dispersed expansions abroad, energy security roles as well as on-going government's economy policy into domestic price and market access reforms.
In summary, performance of the oil and gas market in China is material, complicated, evolving, and core to China's ongoing success.
Given the unique and sophisticated environment China oil and gas companies are in, we believe only solutions that are tailor made, agile, and practical in China's context are right to meet operational and management needs of these companies. To put it simply, while the China oil and gas companies have the same challenges as its global peers they also have unique considerations.
Deloitte China is the market leader in advising China oil gas companies. We bring the integration of solutions from strategy, technology, operations, financial advisory, tax and regulatory perspectives like no other advisor can. We also serve all the major oil companies in China and around the world giving us an unprecedented level of knowledge and experience. In light of this we have taken the strategic initiative to better serve our clients and are launching our China Oil and Gas Center of Excellence. Working closely with our global oil and gas COEs, our vision is to be the undisputed advisory firm in China oil and gas.
Your COE will:
- Be the nucleus of China's most sought after oil and gas thought leadership
- Collect, analyze and predict future trends in the China oil and gas industry
- Host and deploy oil and gas subject matter experts from within China and globally
- Act as a nerve center for our client service teams to share information, solutions, and ideas to enhance the objectives of our clients and China
This COE will be staffed by oil and gas SMEs and will be supported by all China oil and gas LCSPs and LBPs. The COE will also be connected with the other Deloitte Oil & Gas COE's as well as partnering with external COE's from CNPC (and other companies) and the China Petroleum Institute. The COE is co-headed by Chris Roberge and Ryan Chieng, assisted by Diane Cao and Ericson Tong.
The COE is currently conducting its researches in 1) Impact of 14-5 on oil and gas companies, 2) Successful information strategies for China OGC companies, 3) Block chain applications across value chains; and 4) New energy strategies, all in the context of the China perspective for China OGC companies. There are now over 20 China specific thoughts leadership in our library, all in Chinese, and more to come.