Research On Foreign Exchange Rate Risk Management Of CNPC Overseas Projects

The development of China’seconomy and society leads to more energy consuming.Therefore, China’s dependence on foreign oil is increasing in recent years. In order to guardChina’s energy safety and for the purpose of catching up with international competition,CNPC, one of the four national oil companies of China, began its strategy of going-out asearly as1990s and compete with world’s oil giants. The development of CNPC’s overseasprojects has provide a new platform for CNPC, facilitate its development of business and stepof internationalism, as well as strengthen its international competitiveness and make itselfknown in the world. However, the company is faced with more risks, of which foreignexchange rate risk is a significant one. With the acceleration of process of RMBinternationalization and the reform of RMB exchange rate formation mechanism, foreignexchange rate risk has more impact on CNPC, bringing large exchange loss to CNPC everyyear. Therefore, it is significant to pay more attention to foreign exchange rate riskmanagement of CNPC overseas projects.On the base of relative literature and research recoil analysis at home and abroad, thispaper introduces the current situation of CNPC overseas projects, and then analyses theirfeatures in foreign exchange rate risk management of CNPC and exchange gains or losses ofCNPC in recent years. Combining with CNPC’s concrete condition, this paper put forward thewhole process management of foreign exchange rate risk. First identify the objective offoreign exchange management. Then manage the foreign exchange rate risk of CNPC throughthe process the risk management, identify-measure-manage. At last, check the effects offoreign exchange rate risk management and look for defects with afterwards evaluation. Thelast part of this paper is providingsafeguards for foreign exchange rate risk management ofCNPC overseas projects from perspective of foreign exchange rate risk management system,human resource, culture, information construction and national policy.