China's 13th Five-Year Plan (2016-2020) targets reform of state-owned enterprises (SOEs) and corruption across manufacturing sectors, including oil & gas. Unlike previous management-level anti-corruption activities, this quiet reform is taking place at all levels of the country's oil & gas sector. While China is a net importer of oil, the slide in oil prices has had a negative effect on the revenues and profits of China's national oil companies (NOCs) and private oil & gas companies alike, making systematic top-down reform necessary to boost the sector.
ARC Advisory Group observes that efficiency improvement is emerging as a top goal for this sector's reform. This appears to include easing controls on market entry in all parts of the industry and is expected to liberalize exploration & production (E&P) rights, pipeline operation, and crude oil imports.
Industrial organizations across all sectors in China must also boost productivity as they are about to face the toughest reforms since the 2009 economic crisis. ARC Advisory Group believes that industry participants could benefit by using the opportunity presented by the industry reform to re-evaluate, update, and transform their overall automation strategies.
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Keywords: China, Oil & Gas, Reforms, National Oil Company (NOC), Teapot Refiner, Automation Strategies, Exploration & Production (E&P), Pipelines, ARC Advisory Group.