Following the first entry of the refined oil retail market in northern China with Dongming Petrochemical in February this year, BP's downstream business in China has made another big move recently.
html In mid-June, Andy Holmes, chief operating officer of BP Oil Asia Pacific, who was interviewed by Chinese media for the first time, revealed to reporters that in the next five years, BP will add 1,000 gas stations in China. This number exceeds the total number of gas stations that BP has built in China in the past 20 years. indicates that the century-old oil giant will significantly increase its refined oil retail business with an average of two days.In Hohandi's view, China's refined oil retail market is fierce, but demand still has huge room for growth in the future, especially the demand for high-end fuel products will continue to be strong. However, there has not yet been a retail brand in the Chinese market that can achieve the ultimate in convenience, convenience, fuel quality and quality. Building such a high-end gas station that caters to the needs of the future is exactly what BP has to do.
text | Yu Huan
China Energy News reporter
Build a high-end gas station in two days
China Energy News: 1,000 gas stations in five years means that a new gas station will be built in less than two days on average. What considerations is BP's proposal of this ambitious growth plan?
Hohandi: Currently, BP cooperates with CNPC and Sinopec, and operates more than 740 dual-brand gas stations in Guangdong and Zhejiang. Among them, CNPC Bipi Petroleum Co., Ltd. , a joint venture between BP and CNPC, is the first China-foreign cooperation project approved and operated by the Ministry of Commerce of China in the field of refined oil retail, and is also the largest Sino-foreign cooperation project, so BP has a deep understanding of the Chinese market. Against this background, BP firmly believes that China's refined oil market still has huge development potential. We are particularly optimistic about China's gasoline market, especially the high-quality fuel market, and also optimistic about China's aviation oil market.
However, so far, China does not have a refined oil retail brand that can achieve the ultimate in convenience, convenience, fuel quality and quality at the same time. Building such a high-end gas station is exactly what BP has to offer. Based on this, we proposed a business expansion plan to add 1,000 new gas stations in China.
"China Energy News": BP has repeatedly emphasized the creation of "high-end gas stations" in China. What aspects does this "high-end" reflect?
Joandi: is mainly reflected in three aspects: high-quality fuel products, attractive member loyalty programs and novel "convenience store + gas station" operation model.
In terms of fuel products, BP has a high-end fuel brand with a very competitive advantage - Ultimate. According to actual data, in Australia, the fuel consumption of large mining transportation trucks using UTu fuel has dropped by about 6%.
BP implements member loyalty programs in different countries and regions. For example, the member loyalty program we launched in Guangdong through WeChat is very successful. The popularity of WeChat in China is extremely high. BP has launched a membership point system with great discounts through this platform, which is very popular among local customers. In other countries, we usually jointly promote member loyalty programs with other companies, such as chain supermarkets that already have a large membership group, which is relatively novel in China.
BP has also had many successful cases in exploring the "gas station + convenience store" model. At present, BP has established close cooperation with eight well-known local supermarket chains including Marks & Spencer in the UK and Rewe in Germany, closely combining our refueling business with department store supermarket business, providing customers with diverse and convenient high-quality products and services, which is very popular among local residents.
Diversified cooperation model
"China Energy News": Currently, all BP gas stations in China are joint ventures. Will other construction models be considered for the 1,000 new gas stations in the future?
Joandi: BP has a very open attitude regarding the operating model of gas stations, but the specific form still depends on changes in government regulatory policies.BP can accept the construction of gas stations with partners. In the future, if conditions permit, we will also consider a sole proprietorship gas station.
It is worth mentioning that in addition to joint ventures and joint construction, we will also adopt a franchise cooperation model abroad to cooperate with independent retailers: BP provides gasoline and diesel products and allows them to join BP's membership plan and convenience store plan, so these gas stations look no different from BP's self-operated gas stations.
"China Energy News": From the perspective of regional distribution, in which areas will these 1,000 gas stations appear?
Hohandi: The 500 gas stations jointly built by and Dongming Petrochemical will be launched in the northern region. There are many 500 target markets for . The company is still conducting further evaluations within the company and will be announced to the public after confirmation. Regarding the location selection of gas stations, we have a set of screening standards, which are usually in first- and second-tier cities, mainly to see whether the local economic development status matches our gas station planning and the needs of local customers.
"Full competition is a good thing"
China Energy News: Similar cooperation between International Petroleum Corporation (IOC) and local refining companies in China is very rare. Why did BP choose Dongming Petrochemical instead of PetroChina and Sinopec, which have had the foundation for successful cooperation in the past 20 years? What are the latest progress in the cooperation between the two sides?
Hoandi: Dongming Petrochemical is China's leading independent petrochemical enterprise. already has a mature refined oil sales network in Shandong, Hebei and Henan provinces, and is very familiar with the local market situation. At the same time, Dongming Petrochemical also has strong refining capabilities. BP has world-class brand influence and high-quality fuel products, as well as rich and mature "convenience store + gas station" operation experience, and has the ability to provide high-quality services to customers, so the two parties are very complementary, which is the core reason why we chose Dongming Petrochemical. The joint venture formed by
BP and Dongming Petrochemical is expected to be officially listed for by the end of September, and we have also appointed the general manager of the joint venture. She is a woman from Australia with many years of experience in retail. According to the plan, our first joint venture gas station in northern China will be completed by the end of the year. While preparing relevant approval procedures, we are also actively negotiating the purchase or lease of assets. will soon see gas stations with BP sunflower logos in various cities in Shandong, Henan and Hebei.
"China Energy News": At present, competition in China's refined oil retail field is becoming increasingly fierce, and there are many "players" in various strengths. BP's large-scale investment in the layout of gas station business in China is bound to face fierce competition.
Hohandi: competition is inevitable. In fact, competition in the retail field of refined oil has become quite fierce and sufficient. 's entry into the three northern provinces this time will inevitably face the competitive pressure from existing retailers, which comes from IOC, and also from PetroChina, Sinopec and some independent retail brands.
For enterprises, full competition is a good thing. On the one hand, the business growth of a company comes from a bigger and bigger market cake, and on the other hand, it comes from the market share won from competitors. The latter needs to rely on high-quality products and services, which is what BP is happy to see and good at.
But our existing cooperation with PetroChina and Sinopec will not be affected by this, because the current cooperation between BP and China's "two barrels of oil" is concentrated in the southern region.
Layout the future of electrification
China Energy News: Over the past year, BP has purchased electric vehicles and fast charging companies many times. Does this mean that there will be some new changes in the future gas station form of BP, such as providing charging services?
Hohandi: Will our gas station provide other products and services besides traditional fuel? It depends on customer needs. As you said, BP has made too many investments in electric vehicle-related supporting facilities and services. To be sure, we are already considering adding electric vehicle charging devices to future gas stations and providing air refueling services.But specifically, the gas station we jointly built with Dongming Petrochemical, mainly sells traditional fuel products, namely gasoline and diesel.
China Energy News: Faced with the rapid development of transportation electrification, as a traditional fuel supplier, how will BP deal with this change?
Hohandi: According to the forecast of the 2018 version of "BP World Energy Outlook", under the "gradual transformation" scenario, the total global electric vehicles will exceed 300 million by 2040. Even so, 85% of the cars on the earth will still be internal combustion engine cars driven by gasoline and diesel.
But from the perspective of energy transformation, the electrification of transportation in is an unstoppable trend. Therefore, BP must participate in it and even hope to lead the transformation. BP has also formulated its own energy transformation strategy for this purpose. This strategy can be summarized in three keywords: Reduce, Improve and Create.
"Reduce" means reducing emissions generated during the production and operation of BP's entire industrial chain; "optimization" means helping customers improve energy efficiency and reduce emissions through BP's high-quality products, such as Youtu Fuel, Castrol Lubricant, etc.; "Exploration" means innovating BP's business and business model, which is concentrated in three major areas: biofuel, electric vehicles and digitalization. BP will make substantial investments in these three areas and will focus on small startups.
Speaking of electric vehicles, BP has also been laid out in advance. Since the beginning of this year, we have invested in two new energy vehicle fast charging technology companies, hoping to complete the charging of an electric vehicle in the future by filling a box of fuel. may become an innovative point in our future gas station business.
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