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As of the end of November, CNOOC Dongfang Petrochemical Co., Ltd. (hereinafter referred to as Dongfang Petrochemical) has achieved cost reductions and efficiency improvements totaling over 100 million yuan this year, delivering impressive results. Behind this impressive set of results lies Dongfang Petrochemical’s systematic approach to reducing costs and increasing efficiency: from tapping potential across the entire value chain to overcoming production bottlenecks through technological innovation, and then to developing new business strategies based on market demands – all these efforts together have led to achievements in terms of profitability that exceed 100 million yuan. Leverage multiple approaches to unlock efficiency potential across the entire chain. \"Reducing costs and increasing efficiency isn’t achieved through individual efforts alone, but through coordinated action across the whole process and all departments.\" We need to save every penny we can and tap into every potential source of savings. ”Speaking on the approach to reducing costs across the entire value chain, Yu Yanbing, deputy general manager of Dongfang Petrochemical, spoke frankly. Since the beginning of this year, the market for refined chemical products has experienced greater volatility, and financing costs have been under significant pressure. Dongfang Petrochemical keenly identified room for improvement in supply chain financing, where there were issues such as limited financing channels and high costs. Previously, the procurement of raw materials and the settlement of freight costs were mainly handled through traditional transfer methods, resulting in a financing cost rate of around 2.45%, which imposed significant pressure on capital utilization. To address this challenge, the Planning and Finance Department took the lead in forming a dedicated task force; after 3 months of research and analysis, invoice financing was identified as the key solution. The team engaged in individual discussions with 6 key partner companies, including COSCO Shipping and Southern Power Grid, to explore the use of low-interest bill settlement methods, with bank acceptance bills being utilized for frequent expenses such as steam costs, freight fees, and electricity bills. By comparing the discount rates offered by 12 commercial banks, the best partner was selected; in some cases, the cost of bill financing was as low as 0.5%. Furthermore, by applying for credit lines from financial companies, they reduce losses associated with the circulation of bills, thereby further cutting down financing costs. Today, Dongfang Petrochemical’s financing cost rate after deducting crude oil has dropped to 0.97%, resulting in savings of over 2.3 million yuan in financial expenses. By the end of November, the Planning and Finance Department at Dongfang Petrochemical had managed to cut expenses rigorously this year, saving over 3.8 million yuan. Technological breakthroughs: Solving energy consumption challenges in the production process. “The key to reducing costs for refining and chemical companies lies in energy consumption control.” It took us 6 months to tackle the challenging task of recovering condensate water from the storage and transportation system; this not only helped us comply with the **‘dual carbon’ policies but also generated tangible benefits. ”Chang Zujun, general manager of the Production Management Center at Dongfang Petrochemical, explained. Previously, the storage and transportation system of Dongfang Petrochemical faced the problems of \"incomplete recovery of condensate water and severe steam waste\": the condensate water generated by the heating systems in the heavy oil tank area was often discharged directly, which not only led to waste of water resources but also resulted in high consumption of low-pressure steam. In the progress of the renovation project, two major challenges arise: first, the heavy oil tank area is located far away from the condensate water station, and conventional pipeline transportation can lead to backflow of condensate water and heat loss; second, the operating pressure of the heat tracing system is unstable, which may result in fluctuations in the amount of heat recovered. To this end, the technical team worked together with equipment manufacturers to carry out specialized research and development, creating special pipes that are resistant to high temperatures and clogging. A design featuring a slope plus insulation was used to reduce heat loss, while check valves were installed to prevent backflow. Pressure sensors and automatic control valves were added at the outlet of the heating system to dynamically adjust the recovery flow rate in real time. “To find the optimal parameters, we conducted continuous monitoring for 1 month, recording 20 sets of data daily and repeatedly adjusting the valve opening. ”Chang Zujun said. Currently, the condensate recovery rate of the storage and transportation system is 2 tons per hour, resulting in an annual recovery of 17,500 tons of condensate, which can be used directly to replace fresh water in the circulating water system. The consumption of low-pressure steam is reduced by 5,000 tons per year, generating annual savings of 520,000 yuan. In the field of water resource management, the company has implemented real-time measurement and monitoring of fresh water consumption and wastewater discharge at various facilities, as well as optimized the operation of wastewater pretreatment processes. As a result, the amount of wastewater generated per ton of oil produced dropped from 0.618 tons to 0.485 tons, saving 4.7 million yuan in wastewater treatment costs each year. In terms of electricity savings, improvements such as optimizing the flue gas system and installing variable-speed air volume control systems on the compressors in the hydrogenation units have helped to reduce costs by 1.23 million yuan per year... The losses caused by leaks and inefficiencies in production have thus been converted into actual financial savings. To date, the company has saved over 88 million yuan in costs this year through technical optimizations. Market orientation: Seeking new ways to increase revenue through business strategies. “The market does not accept a one-size-fits-all production model; only by keeping up with price fluctuations and making precise adjustments to the product portfolio can one gain an advantage in competition.” ”said Zhao Jianbo, General Manager of the Business Department at Orient Petrochemical. In the first half of this year, the refining and chemical products market showed a pattern characterized by tight supply of high-value-added products and narrowing profits for conventional products. Previously, Dongfang Petrochemical faced the issue of a delayed adjustment in its propylene product structure – the purity of propylene remained above 99.8% for long periods, leading to energy waste due to excessive processing; the specifications for products such as straight-run naphtha and those from the ‘third fraction’ were fixed, making it difficult to adapt to changes in market demand. The biggest challenge is striking a balance between quality and efficiency: it’s necessary to prevent substandard quality, while also avoiding waste caused by excessive quality. To this end, the technical team conducted over 200 process experiments, ultimately achieving a precise control of propylene purity within the \"optimal range\" of 99.6% to 99.7%. On this basis, Dongfang Petrochemical has established a mechanism of \"daily market analysis + dynamic index adjustment\": the business department aggregates product price data on a daily basis; the production management center adjusts parameters such as the dry point of straight-run naphtha based on market price differences, thereby maximizing the content of high-value-added components while ensuring that the products meet quality standards. Another breakthrough on the operational front came from Hainan Island’s diesel market. In light of the high costs and unstable supply of diesel outside the island, the business department team worked together with CNOOC Sales to conduct in-depth research on various demand scenarios such as logistics parks and construction projects, and introduced customized services like tiered discounts and emergency delivery. “We visited the key industrial parks across Hainan Island, approached over 30 potential clients in person, and opened up the market through sincerity and excellent service. ”Zhao Jianbo said that currently, the highest monthly sales volume of diesel on Hainan Island has exceeded 4,300 tons, doubling compared to the same period last year. The annual sales volume is expected to reach 30,000 tons, which could generate savings of over 3 million yuan. Jiang Longyu, Party Secretary and General Manager of Dongfang Petrochemical, said, “Cost reduction and efficiency improvement are ongoing processes.” Next, we will continue to focus on technological innovation and meticulous management, contributing Eastern strength to the high-quality development of the refining industry through improved performance. ”