China Oil Giant Ex-Chief Warns Drillers Becoming ‘Dinosaurs’
- Layoffs not an option in China, culturally or legally
- China’s domestic oil output to continue to fall at $40-$50 bbl
Fu Chengyu.
Photographer: Adam Dean/BloombergThis article is for subscribers only.
China’s biggest state-owned companies will see “dramatic changes” in the next few years as they may downsize and become more efficient, according to the former chairman of two of the country’s biggest producers.
Chinese oil companies have “tremendous room” to improve efficiency and will be “suffering for the next few years” amid the oil crash that’s pushed prices down by roughly half their value from mid-2014, said Fu Chengyu, former chairman of both Cnooc Ltd. and China Petroleum & Chemical Corp., known as Sinopec. Domestic producers need at least $60 a barrel to stabilize China’s slumping oil production, he said.