Chinese Oil Giant Begins Restructuring

The China National Petroleum Corp. (CNPC) is striving to overcome deep-seated management and production problems by launching a restructuring process, according to China Petroleum News.

Five pilot CNPC enterprises have begun reshaping, and the remaining 49 enterprises have submitted their restructuring plans to CNPC headquarters.

Sources from CNPC said that higher production costs, low labor productivity, and serious economic losses make CNPC less competitive than overseas petroleum corporations.

CNPC's assets totaled 506.9 billion yuan (63.4 billion U.S. dollars) in 1998, of which more than 27 billion yuan (3.4 billion U.S. dollars) is lying idle.

The company plans to prioritize its internal system innovation and reorganization by next year, and frame its cross-century strategy to take advantage of 1998's restructuring which enables CNPC to integrate upstream with downstream production.