The oil and gas industry is an industry that involves exploration, development, processing, wholesale, retail and other aspects. The industrial chain is long and can be divided into three parts: upstream production, midstream storage and transportation, and downstream applications.
The upstream is mainly the exploration, development and production stage of oil and gas resources, and the traditional oil and gas equipment and services are mainly concentrated in the upstream stage;
The middle reaches are mainly the storage and transportation of oil and gas resources, including the production of oil and gas pipelines, storage tanks and other materials, pipe network construction and operation, and oil and gas transportation services;
Downstream is the terminal enterprise of refined oil refining and sales, petrochemical products processing. At present, oil companies generally form an integrated layout of upstream and downstream, and the volume is usually very large, which is also a common feature of global oil companies.
The oil service industry belongs to the upstream production process, which mainly includes oilfield technical services and oil and gas equipment, among which:
Oilfield technical services are the general term for engineering and technical services provided to oil companies during their exploration and development. In the international scope, the definition of oilfield technical service standards includes 32 services in 5 major sectors: geophysical exploration, drilling and completion, recording and testing, oilfield production and oilfield engineering construction. The service contents mainly include seismic exploration, drilling and completion, and measurement. Well logging, oil and gas exploration, oilfield construction and other aspects.
The oil and gas equipment industry mainly refers to the industries in which manufacturers provide the required equipment for oil and gas service processes, mainly referring to various mechanical equipment used in exploration, development and production. The main processes of oil and gas field exploration and development include: geological exploration - geophysical exploration - drilling - logging - logging - cementing - perforation - completion - oil production - workover - mining (fracturing) - transportation.
Domestic oilfield service companies include professional service companies (internal companies) under the three major oil groups and many private professional service companies outside the three major oil groups. Among them, the professional service companies under the three major oil groups include Daqing Drilling, Western Drilling, Bohai Drilling, Chuanqing Drilling, Great Wall Drilling, Shengli Drilling and Zhongyuan Drilling. The professional service companies other than the three major oil groups are mainly private companies. Including Anton Petroleum Technology (Group) Co., Ltd., Huayou Energy Group Co., Ltd., Beijing Patrol Oilfield Service Co., Ltd., etc.
Analysis of the segmentation of state-owned and private equipment and service companies can be found that the major state-owned equipment service companies in the market are biased towards service-oriented, while the privately-listed companies in the oil service industry are mainly concentrated on the equipment side.
In the drilling business, PetroChina's drilling workload accounted for the majority of domestic share (the total number of wells in 2014 accounted for 66% of the country). Its drilling services were mainly provided by the drilling companies under the CNPC Group. Private companies accounted for a small share, but maintained an upward trend.
From 2013 to 2014, the number of wells and total footage of the drilling team under the CNPC Group accounted for about 70% of the total number of PetroChina. The other parts were mainly undertaken by private drilling teams. From 2013 to 2014, the number of wells and total footage completed by the drilling team of Sinopec Group accounted for about 90% of the drilling workload of Sinopec. The other parts were completed by the drilling team and private drilling team of CNPC. Baidu search "Leqing think tank", get more industry in-depth research report
In other oilfield technical service businesses, the three major internal technical service companies also occupy a large market share. Among the external companies, large foreign oil service companies occupy a certain share in the segment with high technical content requirements. Private companies are represented by several listed companies, occupying a certain market share in their respective business areas and business areas, but the overall market share is small.
Due to historical reasons, China's oilfield technical service industry has many enterprises, scattered layouts, and small scale. Except for a few oilfield technical service enterprises with strong comprehensive service capabilities, they have a wide range of business scope, and most enterprises are still in the transition stage to professional division of labor. The business is concentrated in a local area, and the business types are relatively single, and the concentration of the whole industry is low. At the same time, with the difficulty of oilfield exploration and development in recent years, in the newly developed oilfield area and new technology application fields, various oilfield technical service enterprises have obtained relatively equal market competition opportunities. At present, the country is accelerating the reform of the oil and gas industry, and the marketization of the industry will gradually increase. Private oilfield technical service enterprises are expected to gain more market opportunities.
Oil and gas reform introduces diversified exploration and development, and private oil service enterprises welcome domestic market opportunities
In July 2015, the Ministry of Land and Resources publicly released five Xinjiang oil and gas exploration blocks. In October of that year, the company officially conducted public bidding, breaking the monopoly of the industry, breaking through the constraints of resource varieties, exploration stages and corporate qualifications, and encouraging private enterprises to participate in the oil and gas exploration business.
In 2017, Xinjiang launched the second round of nearly 30 oil and gas exploration blocks and bidding for the whole society to further accelerate the exploration and development of oil and gas resources in Xinjiang and turn resource advantages into economic advantages. After several rounds of negotiations, three oil companies, Sinopec, PetroChina and CNOOC, agreed to withdraw from the 300,000 square kilometers and nearly 30 oil and gas exploration blocks in Xinjiang. At present, the transfer of the second round of oil and gas exploration blocks in Xinjiang is accelerating, and the second round of mining rights check and optimization work for the oil and gas block is completed.
On May 21, 2017, the Central Committee of the Communist Party of China and the State Council issued the "Several Opinions on Deepening the Reform of the Oil and Gas System." The first of the eight key reform tasks deployed in the Opinions is the perfect and orderly release of oil and gas exploration and mining. System to enhance the ability to support resources. The "Opinions" emphasizes that the exploration block competition transfer system and the more stringent block exit mechanism will be implemented, and the qualification management of safety and environmental protection will be strengthened. Under the premise of protective development, market entities that meet the entry requirements and obtain qualifications will be allowed to participate in the routine. Oil and gas exploration and mining gradually formed a exploration and mining system led by large state-owned oil and gas companies and involving various economic components.
Upstream reforms are expected to improve the efficiency of oil and gas exploration and development and expand the overall demand for the domestic oil service market. For the proven petroleum geological reserves, all should be invested in development. However, due to the development limitations of the above-mentioned “three barrels of oil”, as of the end of 2014, there were more than 8.2 billion tons of proven oil reserves in China that have not been put into capacity construction. About 20% of the accumulated proven reserves nationwide. If this part of the petroleum geological reserves can be put into capacity building, it will bring a substantial increase in the domestic exploration and development market space, and the oil service market demand that plays an important role in the exploration and development field will also be expected to expand.
The diversified participants in the upstream market will bring more cooperation opportunities to private oil service companies and increase the market share of private enterprises.
Compared with the “three barrels of oil” which is more inclined to choose the oil service enterprises in the system under low oil prices, the upstream exploration and development process involving other state-owned enterprises and private enterprises will be more fair and market-oriented, and the exploration and development access will be liberalized. It will also promote the liberalization of the oil service market. Private oil service companies that originally had a small domestic market share are expected to usher in a good opportunity to increase market share.
Considering the activation and expansion of the overall market and the market position of private enterprises, we believe that oil service private enterprises will fully benefit the upstream reform of oil and gas, and it is recommended to focus on outstanding private oil service enterprises with core competitiveness and perfect layout in oilfield service technology. The main representatives are: Hengtai Aipu, Jerry shares and so on. For the full report of this article, please search Baidu for “Leqing Think Tank”.
