Top 10 events in the oil industry in 2016

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Source: China Gas Station Management Forum. Added on: 2017-01-03 10:12:50. Views: 107. The year 2016 has come to an end, and it was yet another difficult year for those working in the oil industry. Faced with the sluggish oil market, we are no longer surprised; instead, we have gradually adapted to surviving in tough conditions, growing stronger and stronger, and have become like little resilient creatures in the oil industry. What major events have taken place in the oil industry over the past year that have shocked those working in this sector and affected their fate? Next, let’s take a look back at the top ten events in the oil industry in 2016. (Excerpt from Oil Link) No.1: The three major oil companies suffer huge losses http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153Q514-0.jpg CNPC, Sinopec, and CNOOC have always been regarded by the public as some of the most profitable companies. But oh dear, in 2016, all three companies were involved to varying degrees with losses. Although CNPC turned a profit in the second and third quarters, it incurred losses of over 13.7 billion yuan in the first quarter, which is indeed concerning ； CNOOC posted a loss of 7.74 billion in the first half of the year, suffering an unprecedented setback ； Although Sinopec as a whole is profitable, its Shengli Oilfield incurred a loss of 2.9 billion yuan in just January, and its upstream business remains in a loss-making state. “\"The most profitable companies\" – this label should now also be taken off the three major oil companies. The market is full of uncertainties; oil is not an industry in which one can make money easily. No.2 “Deep Sea Disaster” is now in theaters: http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153V0U-1.jpg It’s rare to see a movie dedicated specifically to those working in the oil industry being shown in cinemas at last. Ordinary viewers see this film merely as a disaster movie that is hard to understand, while for professional oil workers, it is more like a documentary. Many people in the oil industry are urging that one should not take their families to see it, for fear of scaring them ； Some people exclaim that being there in person and recalling the days of working on offshore platforms fills them with fear. This movie made more people in society realize that working in the oil industry truly means earning money at the risk of one’s life. No.3 Domestic oil production dropped for the first time http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153TP4-2.jpgIn 2016, China’s domestic oil production saw a decline for the first time in decades! Shengli Oil Field is shutting down its wells, as is Yanchang Oil Field; many oil fields in China are closing down their wells. It would be strange if oil production didn’t decline as a result. Oil prices are too low, and for various reasons, China’s oil fields are particularly affected. Producing one more barrel of oil results in a loss of a few dollars, so... According to statistics, in the first 11 months of 2016, China’s crude oil production dropped by 7% on a year-on-year basis; all three major oil companies reduced their production, without exception. The resulting dilemma of “too many monks and not enough porridge”; only the oilfield workers can truly appreciate the hardships involved. No.4 The three major oil companies cut staff http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153W929-3.jpg In 2016, it was not only production that decreased, but also the number of employees. CNPC has publicly stated that its workforce has seen a significant reduction. Although the three major oil companies will not carry out formal layoffs, they are not completely inactive in the face of the issue of too many employees. CNPC’s headquarters has reduced the number of employees in its administrative staff, employees at the Zhongyuan Oilfield have been reallocated to other positions, some employees have retired early, and the number of new graduates hired has been decreased; moreover, many oilfield companies encourage their employees to change jobs or pursue different careers. China’s oil industry is currently experiencing a severe “talent bubble”; in the future, we will undoubtedly see a continued decline in the number of employees at state-owned oil companies. No.5 Oil prices hit bottom and are on the rise http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153S946-4.jpg After facing numerous setbacks, international oil prices have finally started to recover. In January of this year, oil prices plummeted below $30 per barrel, making the first quarter of this year the most difficult for the oil industry in recent years; fortunately, oil prices began to rise steadily thereafter. Have the toughest times for oil passed? Oil prices have remained stable at around $50 per barrel for several months now, which has more or less boosted confidence in the oil industry. No.6 OPEC reaches production cut agreement http://wwwchemicalsafety.org.cn/uploads/allimg/170103/10153S960-5.jpg After a year of disputes among countries such as Saudi Arabia and Iran, OPEC not only reached its first production cut agreement in 8 years within its own ranks, but also came to an agreement with non-OPEC countries like Russia to cut production across the board in 2017. This at least shows us that even oil-producing countries cannot withstand excessively low oil prices; there has been a significant shift in the entire oil industry, which brings some relief. No.7 Reforms in the oil and gas industry: http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153SX9-6.jpg State-owned enterprises are being forced to divest themselves of their ‘four supply services and one industry’ functions; the Energy Bureau is requiring the three major oil companies to make information on their oil and gas pipelines public; there is a push to reduce the number of management levels in government agencies; pilot programs for employee competition for positions are being implemented, as well as pilot programs for employee stock ownership; subsidiaries of these companies are being restructured and listed on the stock market; and zombie companies are being shut down. The reform measures taken by state-owned enterprises this year are diverse in nature. Is the reform of China’s oil and gas industry accelerating? The severe situation has forced the oil and gas industry to introduce a series of reform measures. As Fu Chengyu, the former chairman of Sinopec, said, reality is indeed such that if changes are not made quickly, elephants will turn into dinosaurs. No.8 Venezuela’s collapse: http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153WP7-7.jpg Although everyone suffered from low oil prices, Venezuela deserves a special mention among the top ten oil-related disasters, as no oil company or individual in the world was affected more severely than Venezuela. Due to the plummeting oil prices, in this country that is extremely dependent on oil, money has become less valuable than paper; there’s no money available to print more currency. The country also has five-day workweeks and frequent outbreaks of unrest. Recently, the country’s central bank announced that half of its banknotes have become invalid. Venezuela’s experience serves as a constant reminder that the consequences of relying too heavily on oil for economic development are terrible. No.9 The Rise of Chinese Domestic Refineries http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153W913-8.jpg In 2015, China granted import and usage rights for oil to a number of private refineries for the first time; by 2016, these private refineries had become very influential. Chinese local refineries’ aggressive imports of crude oil not only caused a once-in-a-century shipping backlog at the Qingdao port in Shandong, leading to a shrinkage in the refined oil market controlled by the two major oil companies, but it also pushed international oil prices up to unprecedented levels, shocking the world. Refining companies operating on a local scale truly prove that saying: the best experts are among the people! No.10 The oil industry enters a new normal http://www.chemicalsafety.org.cn/uploads/allimg/170103/10153R408-9.jpg What is the new normal for the oil industry? Oil is no longer the industry that used to produce many \"tycoons\". After going through so much hardship, those who still remain in the oil industry are driven by true passion – they are like tenacious insects that cannot be defeated. Staying by each other’s side and striving to survive in difficult times – this is the new normal in the oil industry! The hardworking oil industry workers won’t be participating this year; others in other industries may do as they please!