China Petroleum Equipment dominates the international high-end manufacturing market

Publish time：

2020-10-30

　　Reporters recently learned from a press conference on "China's Petroleum Equipment Going Global" held in Baoji, Shaanxi Province, that the overseas revenue of China's petroleum equipment manufacturing sector has accounted for half of its total operating revenue. Its marketing network covers nearly 90% of oil-producing countries with an output of over 10 million tons, with products exported to over 80 countries and regions, and annual export contract value exceeding US$4 billion. China's petroleum equipment has long since ceased to be satisfied with occupying the low-to-mid-end market through "high cost-effectiveness," but has gradually developed into a supplier of the international high-end market, standing at the top of the pyramid of international high-end petroleum equipment manufacturing, achieving a magnificent transformation from "going global" to "ascending to the top."

　　Entering the International High-End Drilling Market

　　When reporters conducted research at Baoji Petroleum Machinery Co., Ltd. (hereinafter referred to as "Baoji Machinery"), from managers and model workers to ordinary workers, they would inadvertently mention the NDC project. Obviously, this is a luxurious order that makes every Baoji person immensely proud.

　　In 2009, the global high-end drilling market—the largest drilling rig procurement project of the National Drilling Company (NDC) of the UAE—underwent global bidding, with a total contract value exceeding US$300 million. Facing this drilling rig purchaser, considered the "most stringent" globally, Baoji Machinery stood out from 13 domestic and international competitors to become the sole winner. This was the largest single order for the export of high-end petroleum drilling equipment in China at the time, and it was also the first time an Asian company won a drilling rig procurement contract from this company. Baoji Machinery's drilling rigs marked the first appearance of Chinese petroleum equipment in the high-end Middle Eastern market. The drilling rigs and tools for this bidding were all in accordance with the standards for offshore petroleum equipment, which are currently the strictest standards in the world for petroleum equipment.

　　Since the first contract drilling rig was officially shipped to the UAE in October 2010, Baoji Machinery's drilling rigs have demonstrated excellent performance during operation. Due to the excellent performance of the previously delivered drilling rigs and the pleasant cooperation between the two parties, in 2013, the company received a second follow-up order worth 2.62 billion yuan; in 2015, the company received a third follow-up order worth 1.88 billion yuan, making "Baoji Machinery" the preferred brand for high-end customers without the need for bidding.

　　The successful execution and renewal of the NDC order not only brought the company a total of 6.5 billion yuan in export contracts, creating a record for China's export of high-end heavy petroleum equipment, but also opened up a "four new" model for future international project operations: an innovative international project operation model, a new modern manufacturing model, a new model for full-process quality control, and a new integrated service model.

　　Currently, Baoji Machinery's total cumulative sales revenue for all exported products is nearly 15.5 billion yuan, and it has established a firm market presence in over 70 countries and regions. Among internationally purchased Chinese drilling rigs, over 75% come from Baoji Machinery, particularly in the high-end North American market and the main oil and gas producing markets in the Middle East, where Baoji Machinery has an absolute market share of 30% for newly added drilling rigs.

　　Baoji Steel Pipe Becomes a Famous Export Brand

　　Since its establishment 57 years ago, Baoji Steel Pipe Co., Ltd. (hereinafter referred to as "Baoji Steel Pipe") has produced a cumulative length of steel pipes reaching 400,000 kilometers, enough to circle the earth ten times. By the end of 2014, international market orders for Baoji Steel Pipe had reached 17% of its total orders. Currently, its products have been exported to over 30 countries and regions, including India, Russia, the Netherlands, Sudan, Saudi Arabia, Turkmenistan, and Colombia, making it China's largest, most comprehensive, and highest market share specialized welded pipe manufacturer.

　　Baoji Steel Pipe has currently built Asia's first and the world's third continuous oil pipe production line, making China the second country after the United States to master continuous oil pipe production technology. Continuous oil pipe products have been exported in large quantities to countries and regions such as Russia and the Middle East.

　　According to Bai Gongli, general manager of Baoji Steel Pipe Co., Ltd., before the domestic continuous pipe was available, we had to import continuous pipe from the United States. However, after three years of arduous independent research and development, China finally developed its own continuous oil pipe. Currently, Baoji Steel Pipe's continuous oil pipe products have a single pipe length of up to 8,000 meters. The delivery time for US pipes is 2 years, with a price of US$10,000 per ton of steel pipe. After our production, the delivery time is only 3 months, and the price is US$6,000 per ton.

　　In addition to continuous oil pipes, Baoji Steel Pipe's X-series pipes are also a famous export brand of China. From the earliest X52 to X60, X70, X80, and X90, Baoji Steel Pipe's current X100 represents the world's most advanced level. In 2006, Baoji Steel Pipe won the bid for India's East-West Gas Pipeline Project, supplying 600,000 tons of X70 steel pipes, with a total foreign exchange contract value of US$537 million, which remains the world's largest steel pipe contract to this day, unbroken.

　　Baoji Steel Pipe attaches great importance to product quality and adheres to a refined route. "Our slogan is to cherish every steel pipe like a baby. Because pipelines may seem big, clumsy, and crude, but in reality, they have very high requirements and absolutely cannot have problems," said Bai Gongli.

　　Overseas Sales of Petroleum Equipment Account for Half of the Market

　　It is precisely because of the continuous improvement of products from companies such as Baoji Machinery and Baoji Steel Pipe, and their gradual occupation of the international high-end market, that China's petroleum equipment has taken increasingly firm and powerful steps in going global.

　　"The development history of petroleum equipment clearly records the development process of the entire petroleum industry. Chinese petroleum equipment has become one of the eight major main businesses of China National Petroleum Corporation, and overseas sales have accounted for half of the market." Qu Guangxue, general manager of the Department of Ideological and Political Work of China National Petroleum Corporation, introduced: "Since the 12th Five-Year Plan, the annual overseas revenue of equipment manufacturing has reached 26 billion yuan, and the international market share in 2014 was 48% of total operating revenue."

　　Since the 1980s, China's petroleum equipment has begun to take steps towards "going global" development, from Asia and Africa to Europe and America, from land to sea, from low-end to high-end, from components to complete sets of equipment, from single equipment export to providing comprehensive solutions, with rapid growth in export scale and remarkable achievements, successfully establishing the brand image of "China's Petroleum Equipment" in the international market.

　　Since the 12th Five-Year Plan, the proportion of international market revenue has steadily increased, reaching 29.5%, 35.8%, 37.2%, and 48% of total operating revenue in 2011-2014 respectively. In 2014, the overseas revenue of equipment manufacturing reached US$4.2 billion. Annual export contract value exceeded US$4 billion, with over 150 types of products with cumulative contract values exceeding US$10 million, including leading products such as complete sets of drilling rigs, long-distance pipelines, and special pipe materials, with annual contract values exceeding US$100 million.

　　In addition, in terms of overseas factory construction, Chinese petroleum equipment companies have built 4 assembly plants and 6 equipment repair plants in 8 countries, including the United States, Kazakhstan, Sudan, Indonesia, Niger, Chad, Brazil, and Venezuela.

Keywords：

Petroleum,Equipment

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China Petroleum Equipment dominates the international high-end manufacturing market

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