of 39
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
1/39
For Rotary Club
Calgary
December, 2009
By Jim Wong - Zenalta Management Ltd.
&
Angelo Zia - Canada Link Resources Development Co. Ltd.
Doing Business in China: Road Mapfor Success
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
2/39
Angelo Zia
President
Canada Link Resources DevelopmentCo. Ltd.
Tel : 403-242-2886
Fax: 403-242-2187
Cell: 403-612-2287
Email: [email protected]
223 Signature Close SW
Calgary, Alberta
T3H 2W5
James Wong
President
Zenalta Management Ltd.
Tel : 403-238-4505
Fax: 403-281-1655
Cell: 403-540-4688
Email: [email protected]
40 Bayview Drive SW
Calgary, Alberta
T2V 3N6
Who are we?
40 Bayview Drive SW
Calgary, AB Canada T2V-3N6
mailto:[email protected]:[email protected]7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
3/39
The Petroleum Industry in China:
Road Map for Success
The theme (objective)
of this presentation:
Market entry
strategies;
Petroleum
opportunities;
Successes and failures;
Cultural factors
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
4/39
Outline
o Current China factso Chinese Petroleum
Industry
o Opportunities for Alberta
companies (petroleum)o Strategy and Road map
for success
The Petroleum Industry in China:
Road Map for Success
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
5/39
Beijing
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
6/39
Shanghai
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
7/39
Chinas Topography
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
8/39
Population (2006)
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
9/39
Total GDP by Province (2006)
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
10/39
Top ten coal producer and consumers
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
11/39
Songliao
Basin
Bo HaiBasin
HuaBei
Basin
Ordos
BasinQaidam
Basin
Junggar
Basin
Tarim Basin East
China
Sea
BasinSichuan
Basin
Pearl
Mouth
Basin
1 Daqing
2 Changqing
3 Dagang
4 Jilin
5 Kelamayi
6 Liaohe
7 Qinghai
8 Shengli9 Talimu
10Zhonghaiyou
(Tianjin)
Top Ten Oil Fields
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
12/39
Canada Through Chinese Eyes
Maple leafDa Shan Mark RoswellDr. Norman BethuneA neighbour of the United States
A peaceful nationA multicultural countryWorlds 2
nd
largest country but fewpeopleConservative
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
13/39
China Profile
Population:China1.32 billion (July 2007 est.) Canada32. 9 million
(2007 est.)GDP per capita:
China$ 2,196 (2006) Canada$ 38,126 (2006)
GDP Growth Rate:China11.1% (2006) Canada2.0% (2006)
(Alberta3.0% )Total GDP
China$ 2.904 trillion (2006) Canada$ 1.319 trillion
(2006) (Alberta$189 billion)
( all figures are in Canadian Dollars)
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
14/39
Chinas Middle Class
200 million at present
400 million by 2010
over 500 million make
brand choices
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
15/39
Did You Know?China has the worlds 1st Largest foreign currency reserves-approximately US$1.4 trillion (2008)
Chinese residents savings until 2002 is $2042 billion 17.8% growthfrom previous year
China Gini coefficient: (Source: China International Business)
1978 0.15
1980s 0.281995 0.39
2001 0.40
2004 0.447
2005 0.47 (Canada 0.3)2006 0.496 (USA 0.4)
-the higher the ratio the greater the difference
( United Nations Human Development Report)
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
16/39
Alberta Exports by Region
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
17/39
Alberta Merchandise Export to China
(1995-2007)
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
18/39
In 2008, Alberta merchandise exports to
China totaled $3.05 billion Canadian.Primary exports included ethylene glycol
and polymer, sulfur, nickel, agri products,
etc.
In 2008, Albertas imports from China were
valued at approximately $ 4.5 billion
Canadian consisting of computer parts,
telecommunications equipment, consumer
goods, and machinery.
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
19/39
Energy:
Albertas expertise in oil and gas technologyis particularly relevant to China.
Since 2004 with the assistance of Albertagovernment, China has shown interests in oilsands and heavy oil, and interested in
Albertas oil sands development projects.
The China National Offshore Oil Corporation(CNOOC) and Sinopec Group invested in oil-sands projects in Alberta.
Recently PetroChina proposed an investment
of 1.9 billion dollars in Athabasca Oil SandCorporation.
All 3 major Chinese oil companies (CNPC,CNOOC and Sinopec) have offices in Calgary.
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
20/39
Energy:
Promote joint energy development projects
in China.
Strengthen mutual ties by enhancing science
and technology cooperation, providing
training program, and promotes trades in the
oil and gas sector.
Alberta companies like Husky and Sunwing
/ Ivanhoe have set up offices and
production in China.
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
21/39
Chinese Petroleum Industry
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
22/39
Chinese Petroleum Sector
The three largest Chinese oil and gas firms :
The China National Petroleum Corporation(CNPC/Petrochina)
www.cnpc.com.cn; www.petrochina.com.cn
The China Petroleum and Chemical Corporation(Sinopec) www.sinopec.com.cn
The China National Offshore Oil Corporation(CNOOC) www.cnooc.com.cn
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
23/39
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
24/39
Chinese Petroleum Sector
2007
Oil
production
2007
Gas
production
2007
Oil reserve
2007
Gas reserve
PetroChina 2.75 M bopd 5.6 bcfpd 3.06 B tons 2320.1 bcm
Sinopec 0.79 M bopd 0.77 bcfpd 0.42 B tons 180.8 bcm
CNOOC 0.59M bopd 0.95bcfpd __ __
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
25/39
Chinese Petroleum Sector
China is the 2nd largest consumer of petroleum
products in the world behind the US only
China became a net importer of oil since 1993, now
is the 3rd
largest importer China had 18.3 billion barrels of proven oil reserves
as of January 2007 (OGJ)
China produced 3.8 (mmbbl/d) of oil in 2008; It
consumed 7.85 (mmbbl/d) of oil in 2008.
Gas consumption is expected to triple by year 2010
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
26/39
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
27/39
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
28/39
Chinese Petroleum Sector
Domestic Business
CNPC covers upstream, midstream, downstream areas, andrelated activities and services.
Sinopec covers upstream, midstream, downstream areas, andrelated activities and services also.
CNOOC handles offshore exploration and production, active in
LNG, and also gets into refinery and petrochemical sectors. The three largest firms can compete in every areas.
International Business
CNPC and Sinopec have projects in following countries:
Sudan , Nigeria , Libya , Iran , Pakistan, Myanmar, Indonesia,
Peru , Mexico , Ecuador, Venezuela, Russia, Kazakhstan, etc CNOOC: Projects in Malacca Oilfield, Indonesia, Australia,
Myanmar, Morocco and Nigeria
CNPC, Sinopec and CNOOC now have investment in Alberta
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
29/39
Opportunities for Alberta
companies
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
30/39
Opportunities for Alberta companies In China:
Equipment, technology and consulting services Regulatory, standards and governance training
Technology, trainers and management training
Oil and gas recovery enhancement and infrastructures
(midstream and down stream) Production sharing contract in unconventional
resources such as CBM, shale gas and heavy oil
Collaborative research in upgrading technology, CO2capture and storage, energy efficiency and alternative
energy
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
31/39
Investment Attraction to Alberta:
1. Oil sand investment opportunities
(mineable or in-situ)
2. Conventional oil and gas
3. Value added process and
infrastructures (pipelines, upgraders,
refining and petrochemical)
4. Potash
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
32/39
Strategy and Road Map to Success
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
33/39
General Market Entry Considerations
Suggested Business Practices: Key to Success
BE COMMITTED.Patience, patience and more patienceUnderstand the market and its needsDesign the entry strategy that best fits your products or services
Develop a strong and constant local presenceMaintain a high contact frequencyHave a quick response to prospect enquiriesConduct sales and marketing activities in principal city likeBeijing, Shanghai and Shenzhen and second tier cities like
Chongqing and TianjinMarket your products and services to both end-users and thesupply chain
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
34/39
General Market Entry Considerations (Cont.)
Suggested Business Practices: Key to Success (cont.)
Find appropriate distributors, agents, representatives or localpartnersParticipate in selected national trade shows, conferences andbusiness development missions to China
Participate in events in Canada as wellDon`t focus exclusively on trade shows and major eventsAssess and mitigate political and financial risksUse the services of the experienced Canadian consultants, whoare knowledgeable of the China market
Use the services of the Canadian consulates and embassy,Provincial and city economic development offices and EDC
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
35/39
General Market Entry Considerations (Cont.)
Barriers to Entry
LanguagePriceCountry riskImport and export regulations and procedures
After-sales servicesProspect`s perception of risk using new technologyBrand loyalty and competitionSecurity of National dataRegistration requirements
Patents and copyrights
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
36/39
Cultural Factors
Useful tips
Existing school mates` and business networkIPRDo not pressure or be pushyDo not expect smooth negotiation
Respect faceListen more than talk (Use no humour and slang)Document well, use more diagrams and sketchesPrepare thoroughlyCheck facts carefully
Ensure all team members to avoid costly gaffes
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
37/39
Success and Failure
Successes
Bombardier
Husky
Propak
Westport
U of A
NAIT
Amec
HighKelly
Not so successful
Beef import
Canola import
Z l d CLRD
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
38/39
Zenalta and CLRD
Thank you!!
Market IntelligenceServices (Overview and
customized reports and
matchmaking and business
trip facilitation)
Business Development
Support Services (sector
capabilities and Chinesesuppliers search and
business trip coordination
Contact us
Jim Wong
Angelo Zia
7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China
39/39