The Inevitability And The Prospect Of CNLC's Globalization

With its joining in WTO and its further opening, China has been seeing an amazing economic development. More and more Chinese companies will emerge into the global economy in the near future. Petroleum has always been a key issue to China's economic development. As a matter of fact, imported petroleum accounted for nearly 42% of China's annual petroleum consumption in the year of 2005. To ensure its national energy safety and its overall economic stability, China must find its way to acquire overseas petroleum resource and build up its strategic petroleum reserve.Nowadays many Chinese companies have entered into global market, among them some Chinese petroleum engineering service companies. It is helpful to the healthy development of Chinese petroleum industry in the global market by analyzing these companies'globalization motivation, their success factors and their experiences.China National Logging Corporation (hereinafter referred to as CNLC) is a subsidiary of China National Petroleum Corporation (hereinafter referred to as CNPC). The purpose of establishing CNLC was to provide petroleum engineering services for buy-back blocks in China which were operated by foreign oil companies - we call it buy-back projects. At the end of 2006, CNLC has been providing petroleum engineering services in 16 countries worldwide, with annual revenue of $160 million and profit before tax of $20 million (2006).This article analyses CNLC's motivation of globalization, its competing environment and its success factors with the fact of CNLC's successful development in the global market. It tries to find out the pattern of CNLC's development. By applying the theory of development phase, it analyses the CNLC's success of globalization and the key factors for its development, with an intention to help CNLC break through the bottleneck and develop itself healthily.This article composes of five chapters. The first chapter gives a brief introduction of CNLC, which summarizes CNLC's development, its organizational structure and its main business. The second chapter introduces the progress of CNLC's globalization. It first analyzes CNLC's motivation and the environment of globalization, then by applying Zhou Kun's"ceiling"theory, it describes that how CNLC had broken through the first and second ceiling, and the reformation and innovation that CNLC has made while facing the third and fourth bottleneck. The third chapter gives a theoretically analysis of CNLC's globalization. It analyzes CNLC's motivation of FDI (Foreign direct investment), its competing environment and its success factors of global development. The forth chapter does a"SWOT"analysis about CNLC's globalization. This chapter tries to find out the opportunities and threats that CNLC may encounter, and the strength weakness that CNLC may possess. The last chapter discusses the strategies that CNLC should adopt in order to capture the opportunities, to confront the threats and to develop itself in a healthy and stable way.