An Analysis Of Risk And Countermeasures On China Petroleum Enterprise Of Transnational M&A

Along with the development of our country’s economy,the demand of energy resource-petroleum is increasing continuously. However, the petroleum reserves of our country presents decline trend. Moreover, Anjian Wang, who comes from China geological academy of sciences research institute, pointed out that the zero growth of energy consumption will be expected to come in2030-2035at the Global energy pattern and Chinese energy security report. And the security of energy will face huge risk. Such as the energy security degree is reducing and the ratio of foreign dependence is rising, especially the ratio of foreign dependence on oil will up to75%and the gas will almost be40%. Therefore, our government adopted the energy going out strategy to meet the development of our national economy demand for energy. Gaining petroleum resources from the merger and acquisition is one of the important ways. At present, the international structure also changes continuously. However, the political turmoil of big petroleum reserves countries will lead to the competition between the countries. In addition, due to the complexity and uncertainty of transnational M&A program and Chinese petroleum enterprises starts late, the lack of experiences and talent on transnational merger and acquisition, and imperfect management system, our country enterprises encounters risks which comes from external and internal environment, such as politic, decision of merger and acquisition, financing and the management integration.Under the theory of foreign direct investment and M&A, the paper analyzes the risks of transnational M&A which are faced by Chinese petroleum enterprises. At first, the paper states the agent and the statement of the transnational M&A of Chinese petroleum enterprises in recent years after analysis of the features of risks, such as the demand of international competitiveness, the requirement of country’s energy security and so on. And the scale of transnational M&A of Chinese petroleum enterprises is expanding and diversification. And then the paper goes on the identification and estimates the risks according to the AHP and fuzzy synthesis evaluation method after the analysis on the negative factors. And then, the paper thinks Chinese petroleum enterprises will encounter risks and the effect of M&A decision is the maximum one of the evaluation. At the end of the paper, it puts forward the countermeasures and suggestions to answer the external and internal risks. The paper thinks that our government should create the perfect policy law environment and enhance the dialogue between the merger and acquisition countries. In addition, the petroleum enterprises also should establish the perfect risk evaluation system and develop talent in transnational M&A. Last not the least, the management of integration plays a vital role after the M&A. All of the measures will promote the development of Chinese petroleum enterprises, which can gain more petroleum resource and promote the development of economy.