2009-12 clrd - dec 1 2009 presentation on china

7/31/2019 2009-12 CLRD - Dec 1 2009 Presentation on China

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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


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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]


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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


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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


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Beijing


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Shanghai


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Chinas Topography


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Population (2006)


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Total GDP by Province (2006)


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Top ten coal producer and consumers


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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


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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


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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)


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Chinas Middle Class

200 million at present

400 million by 2010

over 500 million make

brand choices


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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)


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Alberta Exports by Region


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Alberta Merchandise Export to China

(1995-2007)


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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.


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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.


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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.


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Chinese Petroleum Industry


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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


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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 __ __


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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


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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


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Opportunities for Alberta

companies


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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


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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


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Strategy and Road Map to Success


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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


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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


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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


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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


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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


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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


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2009-12 clrd - dec 1 2009 presentation on china

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