GRM 2010 GRM 2011

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A preliminary study on strategies of Chinese firm collaborating with Gulf nations firms
Paper Proposal Text :
ABSTRACT: Although China is an important oil and gas producer in the world, it now relies heavily on importing oil and gas to support its fast developing economy. Within this context, major Chinese oil and gas firms, namely, CNPC, Sinopec, and CNOOC, are becoming more and more active in collaborating with international partners, including Gulf nations firms. In this preliminary paper we explore the key characteristics of these Chinese firms’ strategies in collaborating with Gulf nations firms. Our research methodology is mainly interview based case studies. In the past 10 years we have been working closely with Chinese oil and gas companies, especially CNPC, and have the opportunities to interview many of their top managers, engineers, and workers (in fact, we have published a book contains 24 case studies about technological innovation at CNPC, and a new book is just finished). To further develop this paper, we plan to interview more people in these firms, focusing more on their activities in the Gulf nations. Of course, in order to do good case studies we draw on related streams of literature(mainly technological innovation, firm strategy, and international businesses).
From our study, several interesting issues emerged. First, collaboration between Chinese oil and gas firms and Gulf nations firms in energy is highly important but is only part of an even big collaboration movement. There exist strategic complementarities between China and the Gulf nations (China’s fast expanding economy not only needs investment but also creates a lot opportunities for investment, while Gulf nations are transforming their economies and seeking investment opportunities globally). Collaboration between Chinese oil and gas firms and Gulf nations firms could take advantage of these complementarities.
Second, Chinese oil and gas firms are able to make more and more contributions in collaboration because of their increased technological capabilities. Low cost labor is becoming less and less important. For example, accordingly to our study, CNPC, the 3 largest oil and gas company in the world (2014), and the 4th largest in the Fortune 500, now are among the largest R&D spending oil and gas firms, and have developed many leading technologies in the world. A specific case is Changqing Oil Field. Because of the complex geological conditions, few people believed that Changqing would be able to become a big oil and gas producer. However, sported by CNPC, Changqing has been able to break the constraints of existing theories of oil and gas formation and develop new theories. Now Changqing is the largest oil and gas producer in China (production in 2014 is 55 million tons of oil equivalent). Advanced technologies would be able to make more contributions to sustainable development of oil and gas in Gulf nations through collaboration.
Third, there exist big challenges in the collaboration between Chinese oil and gas firms and Gulf nations firms. In many cases, these challenges do not come from the collaborating partners but from the complicated international environments. The collaboration between CNPC and Iran is a good example. In this case, the major challenge comes from the Iran-US relationships.