China has the most complete industrial chain in the world, but what industries does the full industrial chain cover? What is its global status? What challenges and opportunities does it face?
Let’s take a deeper look at China’s mining services industry.
Mining services are the invisible pillar of the industry.
Although coal mining professional and auxiliary activities seem ordinary, more than 60% of China’s oil and gas exploration and development investment will flow to the professional service field in 2024.
Professional and auxiliary activities for oil and natural gas extraction span multiple links. The global oil services market will reach US$385 billion in 2024, with China’s market accounting for approximately 12.3%, ranking second in the world.
However, there are five major cognitive contrast points in the industry, such as large scale but low awareness, technology intensive but talent shortage, etc.
Judging from the current status of the industry, China’s oil and gas service market size will be approximately 470 billion yuan in 2024, a year-on-year increase of 8.2%.
Revenue from coal mining professional and auxiliary activities was approximately 180 billion yuan, a year-on-year increase of 5.3%.
Other mining industry service markets are relatively small, but are growing the fastest, with a year-on-year growth of 15.6% in 2024, becoming a new growth pole in the industry.
There are various types of services, including geophysical prospecting, drilling, logging and logging, etc., and the proportions of different services vary.
China’s mining service industry shows obvious “resource-oriented” distribution characteristics, such as the Bohai Bay Basin, Sichuan Basin, Ordos Basin, etc., each with its own characteristics.
In terms of leading companies, COSL is the largest oilfield services company in Asia. Its business covers multiple sectors and has core advantages such as marine service monopoly and high-end equipment independence. In 2024, its operating income will be approximately 42 billion yuan and its net profit will be approximately 2.8 billion yuan.
Petrochemical Oilfield Services is a professional oilfield services company under Sinopec Group. It has a complete industrial chain and performs well in land services and shale gas services. In 2024, its operating income will be approximately 68 billion yuan and its net profit will be approximately 1.5 billion yuan.
Anton Oilfield Services is one of the largest independent oil and gas field service companies in China. Its core business is technical services and project contracting. It has the advantages of a flexible mechanism as a private enterprise, a high degree of internationalization, and technological differentiation.
International comparison shows that the global oilfield services market presents a “three-legged” pattern. Although China is the second largest market, there are gaps in revenue scale, overseas proportion, R&D investment, high-end equipment, etc. compared with international benchmark companies.
The core gaps are reflected in technology, talent and internationalization, such as high-end equipment “stuck”, shortage of comprehensive talents, low proportion of overseas revenue, etc.
In order to achieve a breakthrough, China’s mining service industry needs to make efforts in technological breakthroughs, talent cultivation and international layout.
Technically, we focus on key areas to organize joint research between industry, academia and research, and establish a special fund for domestic substitution; in terms of talent, we promote the joint construction of a training system between universities and enterprises and establish an industry talent development fund; internationally, we establish a localized service base, participate in the formulation of international standards, and explore the ‘technology for market’ model.
In the future, the market size of China’s mining service industry is expected to grow steadily, technology will develop toward intelligence, greenness, and integration, and the competition landscape will also evolve, with increased concentration, the rise of private enterprises, and accelerated internationalization.
At the same time, the industry needs to continue to improve in terms of industrial chain coordination, regional development, and talent strategies to achieve the goal of moving from ‘big’ to ‘strong’ and from ‘China’s leading’ to ‘world-class’.
