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Summary of Keynote Address

The Fourth NOC Forum in Dhahran, Saudi Arabia 
Presentation by Zhou Jiping, Vice President
November 24-26, 2006

Honorable Excellencies, Distinguished guests, Ladies and Gentlemen,

Good Morning!

Invited by Saudi Aramco, we all are granted with this wonderful opportunity being in this beautiful and peaceful city, Dhahran for the 4th NOC Forum. The Arab Sea, with its vastness, greets and embraces the CEOs and executives from over 20 national oil companies of the world. In the last few days, we are impressed by the great organization and warm hospitality of the host as well as the passion of the Arabic people.

Please allow me, on behalf of CNPC and all other NOCs present here, I would like to express my sincere gratitude to Saudi Aramco, our host at this NOC Forum. I would also like to thank the members of the Steering Committee, whose tireless efforts during the past 18 months made both the organization and the substance of this event such a great success.

This Forum has been extremely beneficial. I can certainly say this on behalf of my company, CNPC, but, based on my conversations with other NOC representatives during the past few days, I also believe it applies to many others. The report of the Technical Working Groups that we heard on the first day was very informative and an eye-opener to many of us. We all know that the Working Groups were at work, that they were holding meetings and writing reports, but the scale of their achievements and their seriousness in tackling the mandate given to them in Rio was truly impressive. We learned a lot from that session; as importantly, we were all reassured and encouraged about the role and mission of the NOC Forum after hearing them. Our CEOs reached consensus that they will continue to support the working groups' efforts by offering adequate funds and personnel, and open research facilities among NOCs to meet the technical challenges ahead of us in terms of environment protection, gas development and petroleum technology research and development.

In the last two days meetings have benefited me a lot, I think you may agree with me on this point. Taking this opportunity, I'd like to share with you about my thoughts through the Forum.

NOCs are becoming the major players for the development of the world oil industry. National oil companies are the world major suppliers for oil and gas resources. Based on the latest information of Petroleum Intelligence Weekly, 26 national oil companies are in the top 50 oil companies list of the world. The remaining recoverable oil and gas reserves owned by the 26 national oil companies represent 75.8% and 46.3% of the world total.

The role of the national oil companies is more obvious today. National oil companies are more internationalized. NOCs are transforming now to international companies from what used to be regional ones, from a passive manner to an active participator. The development of national oil companies will determine the future of the world oil industry. I think it's maybe the reason for us gathering here today, I am sure you will all agree with me.

Human Resources issue is the first and foremost issue for NOCs. At this forum, a lot of time was given to the discussion on this issue and many good comments and suggestions come out of the discussion relating to recruiting and retaining of qualified staffs, advanced technical training and developing global leaders of the industry tomorrow. It's difficult to imagine a more pertinent and timely topic for us than Human Resources, and I would like to thank the Steering Committee for recognizing this and including it in the agenda. Today, NOCs are blessed with all necessary financial and natural resources, and they can acquire vast amounts of necessary technology. But without adequate human resources, no NOC can meet the challenges put in front of it.

Currently, the world oil industry is facing with shortage of skilled people. Since late 1980s, oil companies started to cut manpower because of low oil prices. As a result, many skilled personnel shifted to other industries, such as IT industry. Petroleum education was also impacted with shrinkage of scale. This side-effect shows up to the industry and this is a must issue for the industry to handle with.

The importance of human resources was well-elaborated in Mr.Jum'ha's opening speech. I am impressed by his view that people represent our essential success factor, we should invest in people like we invest in major projects. The future success of NOCs much depends on "Right time, Right place and Right people" as the old Chinese saying conveys, and among which right people is the most critical factor to ensure success.

As our discussion highlighted, NOCs do face unique challenges when it comes to human resources, including, certain limitations on the talent pool from which we hire, adequate technical training facilities and experience, shorter histories and operational experience than some IOCs, etc. But there are some solutions out of our discussions to all of these challenges, including but not limited to collaboration between companies with colleges and universities to nurture future talents; emphasis on on- the- job training to further improve the competence and capability of our existing talent pool; development of incentives to attract and retain qualified people, not only by offering them a good pay, but more importantly to give full consideration of their career development; and preparation for future leaders of the industry mainly through managing mega projects.

In China, we have rather good petroleum education system, and we hope we can do some thing to promote our cooperation with other NOCs in this regard. 

Sharing of best practices will benefit us all. What gives all of the discussion that we've had on all of the topics concrete, operational significance to this Forum is the discussion of Sharing of Best Practices. That is the theme that highlights the ultimate benefits that can form cooperative measures to all NOCs that are participating in this Forum. This issue was made very clear when we heard the report of the Technical Working Groups, and it also became very evident during the discussion of Human Resources and the last session, which was devoted to the topic of Sharing of Best Practices. I believe that there has been number of interesting proposals put forth, which we should all consider seriously. One thing I'd like to particularly mention here, is the due social responsibility that NOCs should undertake. We, NOCs, shall not solely focus on profit-earning, and actually we should take more social responsibilities to promote the harmonious development between companies and communities. 

Ladies and Gentlemen,

NOC forum aims at promoting cooperation through exchange and communication, and promoting common development through our cooperation. There is no doubt that this event will promote beneficial cooperation among us, and play an active role for the development of the world oil industry.

In October 2008, Sinopec, CNOOC and my company CNPC will co-host the 5th NOC Forum in Beijing. The year 2008 is the year we are anticipating for the 29th Olympic Games. The slogan of the Beijing Organizing Committee for the Games is "One World, One Dream". I believe it also conveys the same message of our forum. Representing the host of the coming event, we sincerely invite all of you, our friends come to Beijing then. Hope to see you all in the beautiful autumn Beijing.

See you then, our friends.

Thank you for your attention.

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