On the recently released 2019 China Top 100 Brand Value Rankings List,China Petroleum Company Limited(hereinafter referred to as China Petroleum) took the 12th place. The brand value of China Petroleum on the last Top 100 Brand Value Rankings was 153.443 billion yuan, while in 2019 it reached 214.044 billion yuan with an  on a year on year increase of 39.49%. The company retained its advantages on the 12th place.

China Petroleum Company Limited is a state-owned key enterprise and one of China’s major oil and gas producer and supplier. It is a comprehensive international energy company that integrates sectors such as exploration and development of oil and gas, refining and petrochemical, sales and trading, pipeline transportation, engineering, construction, equipment manufacturing and financial services. China Petroleum holds its dominant position in domestic oil and gas exploration and development which covers oil and gas operations in 38 countries and regions worldwide.

In today’s profound adjustments in the global energy landscape, the company accelerates the promotion and development of energy transformations that are highly efficient, clean and diversified. The oil and gas industry is facing great responsibilities in handling global energy chanllenges. As a major player in the oil and gas industry, China Petroleum has always been committed to working with the government and different enterprises on the industry chain actively, striving to provide clean, low-carbon and affordable energy to co-build a future with sustainable energy.

Fifty-two percent of the world’s proven reserves of oil is stored in sandstone reservoirs, the final harvest rate of which is generally 33% with two thirds can not be exploited out. Each percentage increase on the harvest rate is equal to the reserves of another new Daqing Oilfield, and how to improve the harvest rate is an urgent and key technological challenge in this industry worldwide.

Cooperating with the China Research Institute of Petroleum Exploration and Development, Northeast Petroleum University and China University of Petroleum (Beijing), after 20 years of research, Daqing Oilfield innovated on the ASP flooding theory and independently developed an integrated engineering technology system which made China the only country which posses the complete set of the technology and the industry application in the world. With the application of ASP flooding technology, Daqing Oilfield has accumulatively increased its oil production by 20.56 million tons with the output value of 67.75 billion yuan, and the company was awarded the National Science and Technology Progress Award.

By increasing investment and accelerating the R&D and application of new technology to promote the upgrading of the gasoline and diesel product quality, the company strives to supply more clean and efficient oil product for the market to meet the goal of promoting energy consumption structure optimization with engergy products. In 2017, with the timely quality upgrade of gasoline and diesel for National standard V vehicles, China Petroleum invested special funding to research and develop the upgrading program of National standard V gasoline and diesel. By the end of 2017, China Petroleum achieved to supply National standard V gasonline and diesel in Beijing, Tianjin, Hebei and the “26+2” surrounding cities ahead of the schedule. In 2017, China petroleum supplied  114.163 million tons of oil products (gasoline and diesel) to the domestic market, which accounts for 37.2% domestic market share. Among them, high-grade gasoline and aviation kerosene supply volume saw a year on year increase.

Chinese Petroleum has also developed a high yield of gasoline and achieved low-carbon catalyst which was successfully promoted into application at Lanzhou Petrochemical, Guangxi Petrochemical and Dagang Petrochemical. With this technology breakthrough, the company reduced carbon emissions while increasing gasoline yield bottlenecks, which enables the company win the 2017 National Science and Technology Progress Award.

China Petroleum focus on the future and continues to develop geothermal energy, biofuels and other  renewable energy sources. The company also made substantial progress in terms of natural gas hydrate production test.

The natural gas hydrates is also known as "combustible ice." The reservation of the “Combustible ice”  in the world is very rich, its quantity is equivalent to twice of the total amount of other known fossil fuels globally, and its main distribution is in the ocean with a small amount in tundra terrain. One hundred and sixty-four to one hundred eighty cubic meter of natural gas can be generated by decomposing one cubic meter of natural gas hydrate which is a high efficient and clean energy that is called the green energy for the 21st century. 

From March to July in 2017, China Petroleum as a general contractor, carried out China’s first trial extraction of combustible ice at Shenhu South China Sea and successfully achieved continuous gas production for 60 days, during which the total gas production reached 309,000 cubic meter with an average daily gas production of 5,151 cubic meter, which made a world record of the longest in duration and highest in production of natrual gas. Combustible ice is named as China’s No. 173 new mineral, and the Party Central Committee and the State Council sent a special congratulatory telegram to congratulate the successful combustible ice test production.

Facing the challenges of continued low price of international oil market and unstable political situation of certain regions, the company joins hands with local government and partners and strives to ensure the stable operation of cooperated projects. China Petroleum adheres to the concept of “mutual benefit, cooperation and development”, giving full play to the advantages of comprehensive integration and capital, technology and management advantages, the company signed a series contracts of natural gas transaction, pipeline transportation, gas storage construction etc with Russia, Uzbekistan, Azerbaijan, USA etc. China Petroleum’s overseas oil and gas operation production throughout the year reached 162.74 million tons with an equivalent equity yield of 89.08 million tons, a year on year increase of 17.2%, which satisfied the supply requirement and contributed for the economic development of the region.

Adhering to the concept of “safety is above all”, China Petroleum continues to deepen the operation of its social safety management system, constantly strengthen the risk control of social safety and reinforce the construction of emergency management system, which brings steady improvement to the company’s comprehensive capability of handling emergencies. The company implemented special safety inspections for spring operation commissioning, anti-typhoon storm surges, winter offshore operation and wharf safe production. Supervision system for major safety risks is implemented and emergency drills are carried out in respect of handling fire and explosion of offshore gas and oil facilities, oil spill pollutions, personnel water falling, etc to ensure the stable and orderly offshore operation. The company constantly improves the safety management level of dangerous chemicals, which includes strengthening the management system construction for the whole procedure of production, storage and transportation of dangerous chemicals, organizing and implementing centralized training for leaders in dangerous chemical companies and putting online of the comprehensive supervision information platform for dangerous chemicals. At the same time the company also constantly elevates safety performance ability by carrying out security awareness training for employees, full verification of safe production responsibility system, the implementation of safety standardization for basic production and operation, safety performance ability assessment and safety technique evaluation and performing matrix style safety knowledge and technique training.

As a low-carbon economy advocate and practitioner, China Petroleum actively develops low-carbon energy such as natural gas, coalbed methane,coal seam gas and biomass energy. The company also carries out specific research of low-carbon and low-carbon technology research and development, establishes special and major projects for low-carbon and clean development technology and implements scientific and technical research in CO2 flooding, aerospace biofuel production, optimization of refining and chemical energy system, etc. The company pays more attention to optimization of its own energy consumption structure while providing clean oil to the community. The company also focuses on the carbon emission and carbon footprint generated during its production and operation. Using renewable energy such as geothermal and solar energy as its own production consumption energy, the company reduced the carbon emission for its production in regions such as Huabei oilfield, Tarim oilfield, etc. 

China Petroleum actively participates in carbon emissions trading and achieves carbon reduction targets with the help of the market mechanism. Tianjin Carbon Emissions Exchange, established with the joint venture of China Petroleum is the first comprehensive emission trading institution in China. The energy saving and emission reducing project developed by China Petroleum has achieved to save more than 200,000 tons of standard coal each year, which is equal to a 500,000 tons of reduction in carbon dioxide emission.

The company actively supports forest carbon construction and tree planting activities. The company also co-founded the China Forest Carbon Fund with National Forestry Administration, which accumulatively constructed over 3 million acres of forest. Meanwhile, China Petroleum also set up Greening Committee and continued to conduct tree planting in factory area, mine area and living area. By the end of 2017, the green field area of China Petroleum oilfield reached 0.293 billion square meters, and the coverage of the green field for its living area reached 43.97%. A total yearly of 649,000 people participated in the voluntary tree planting activities, planting 2,178,500 trees.

Following the tenet of “devotion in energy, creation in harmony” , China Petroleum actively fulfills their social responsibility, operates by law, keeps honesty and trustworthy, conserves resources, protects the environment, keep people-oriented, constructs a harmonic society, contributes to society, realize value sharing, dedicates itself to the organic unity of economy, environment and society three major responsibility and strives to be an excellent enterprise citizen with more fortune creativity, brand influence and social appeal. In terms of financial data the company also shows a good performance.

Firstly, changes in the underlying financial data leads to changes on financial assessment data and value of indicators as follows:

Note: in which the decrease of tangible assets income leads to increase of intangible assets income. The ratio of income brought by the brand factor to intangible asset income remained the same. Thus, the brand income(BCF) has decreased by 54.92% compared to last year.

Secondly, the difference in historical brand income, such as the difference in 2017 and 2016 leads to the difference in the forecast brand income.

Thirdly, the industry's average return on assets Z, brand strength scores, brand strength coefficient, discount rates, etc., ultimately led to changes in brand value. Details are as follows:

Note: in which changes in the underlying financial data and brand strength, resulting in a slight increase in brand strength score; the overall average net asset income of the energy industry increased;
the selected forecasting increasing rate of brand income are the average value of the increase rate of operating income  for the last six years, rather than the average value of operating income in the last three years, which improved the accuracy of the results.

The predicted brand revenue is different, so when the discount rate and the income period are determined, the discounted value of the brand income is naturally different, that is, the brand value is different.

It can be seen that the financial data of the enterprise is different if we choose different time to conduct the valuation.The brand strength score also changes with time. The result of the calculation for brand valuation will be different if all the relevant data is different, such as differences on average industry return on assets, brand sharing rate, predicted future increase rate of brand income.

Note: China Brand Value Network(www.bvrcn.com) continues to keep a close eye on the brand building of the listed brands, and welcomes people from brand, business, consumer, and media sectors to pay attention to the brand of Chinese companies. We will continue to analyze any changes of the companies on the China Top 100 Brand Value Rankings List.In the meanwhile, We also welcome well-known domestic and oversea companies provide their brand information and data to gain acknowledgment from more consumers. China Brand Value Network(www.bvrcn.com) will use its own resources to promote brand value and share brand information from all angles and with every promotion channel.

Note: with the integration and association of pragmatic and professional brand planning companies, celebrities from brand valuation sector,, China Brand Value Network(www.bvrcn.com) jointly released 2019 China top 100 brand value rankings with  project group of Peking University China Brand Valuation Standard Research Platform, experts and scholars.

On the basis of comprehensive, scientific, independent survey and in-depth research and reasoning to the development of brand value, the project group of Peking China Brand Valuation Standard Research Platform preliminarily established “Peking University China Brand Valuation Standard”.

Brand value evaluation standard is based on seven dimensions, 34 categories of elements and more than 80 indexes in brand leadership, product, quality of service, creativity, legal rights, brand building, social responsibility and financial performance. It established a relatively complete comprehensive index system, and truly focused on the regular pattern and condition of the brand system operation and future development trend. And then, it conducts prudent, exhaustive and comprehensive evaluation on the aspects of the formation, subsistence and development, brand benefit, etc.

Adhering to the principles of corporate sustainable operation, economic value, expected income, and financial stability, based on the public data from last four years and prior, combined with field research and consumer research data, market data, the project group conducted detailed data collection research in seven dimensional systems.

According to the international common practice on brand valuation, the relationship between brand strength and brand revenue risk is established. The discount rate applicable to future brand income is converted from the brand strength score, with which the stable and reliable brand earnings brought in later by the brand is forecasted. The brand value is calculated using the present value of excess income method.

In the process of valuation, hundreds of professional experts and scholars, senior company management are invited to appraise and select the candidate brands which published their financial information. The procedure of the valuation is scientific and prudent. The acquisition of some indicators cannot completely adopt an objective method, and it is necessary to rely on expert research methods such as expert ratings or consumer surveys with certain subjective components. Therefore, although the brand valuation strives to be objective, we still need to treat the evaluation results with a relative and dynamic thinking. Generally speaking, this is a set of brand valuation methods that are continuously being checked and repeatedly reasoned and strive for objective, fair and scientific.

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Brand origin, brand establishment time, brand core competitiveness, international sales scope, sales in China, awards, business license, company profile, patents, non-patent technology, intellectual property documents, trademarks, registration certificates, registration documents, brand building status, marketing situation, production and operation situation, research and development, industry situation, financial situation, social responsibility performance, corporate (corporate leadership) image publicity materials, innovation, brand slogan, etc.

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