Slack oil prices, excess
supply depress value
SOEs invest to meet national strategic goals
The energy category, which includes two State-Owned Enterprises, PetroChina and Sinopec, decreased 29 percent in value, following a 1 percent decline a year ago.
The decline in value, the greatest among the 24 categories examined the BrandZ™ China Top 100 report, was exacerbated by the plunge in oil prices and worldwide demand during the initial stages of the COVID-19 pandemic, which severely lowered energy brand revenue during the first quarter of 2020.
Ongoing factors influencing the performance included lower global oil prices and slower world economic growth, which resulted in slackened demand and over capacity. At the same time, the brands invested to meet government strategic objectives.
PetroChina expanded oil and gas exploration and planned to vastly increase its fracking operations. Reflecting the Chinese government’s desire to make its SOEs more competitive, Sinopec planned to restructure, consolidating five business units into four: capital finance and support; refining and sales; chemical engineering; and oil, gas, and new energy.
To be consistent with the product category names used across the BrandZ™ library of brand valuation reports, the oil and gas category was renamed energy in this edition of the BrandZ™ China Top 100.