The Study Of The Profit Model Of PetrolChina

Profit model is a pattern to bring benefits to an enterprise and it is the basis for a enterprise's survival. Profit model decides the location in the value chain about enterprise's business and guides enterprises to make money. Propriate profit model can intergrate internal and external resources, graping favorable opportunity to avoid threats. It can play the enterprise's advantages and avoid their shortcomings. A lot of profits can be made.The oil is a strategic resource and it is related with the economic development, social improvement and national security. In recent years, our crude oil imports climb year after year and the contradiction of supply and demand is very obvious. It has become one of the main bottlenecks to restrict China's economic and social development. As one of the largest National Oil Company in China, PetrolChina Company Limitde(hereinafter referred to as "PetrolChina") should perform the sacred mission to protect the security of China's oil safety. Therefore, building a excellent profit model is the need of not only the business' development, but also implementing our oil strategic and protecting the safety of China's oil needs.PetrolChina was named one of "Asia's most profitable companies" for five years on end. However, we find its profitability is lower than that of the world's largest oil companies Exxon Mobil (hereinafter referred to as "XOM") in all aspects of the value chain, based on the analysis. Why is its ROE close to XOM's? Because its value chain links the larger proportion of sales in the upstream exploration, the strongest profitability segment, and the small proportion in the oil refining and chemical sectors, the weaker profitability relatively. But it exerts great influence on people's livelihood. At the same time, it isn't better than XOM in the management of oil, overseas strategic effectiveness. The profit model of PetrolChina needs to be improved and optimized further.We examine the profit model of PetrolChina with profit model theory, based on financial analysis as a primary approach. We interprete how PetrolChina builds its profit model under its established business strategy. At the same time, we compare it with the international oil company XOM and the domestic oil companies like Sinopec, CNOOC and find its internal problems and external challenges in its profit model.Finally, we put forward some approaches to optimize profit model of PetrolChina.