ZhenHua Oil sets up a Science and Technology Committee, creating a decision-making mechanism for scientific and technological management with the top leader as the director. The committee ensures that there is consistency in the company’s scientific work and development strategy, and its rapid and effective implementation. In addition, ZhenHua Oil has established and improved a series of systems and methods for encouraging innovation, enhancing management capability and standardizing workflow.
ZhenHua Oil’s capital investment in technical innovation is equal to or higher than the industry average, with capital provided by both the headquarters and overseas project companies. By including the level of R&D investment into performance appraisal, it leads and encourages the development of technical innovation initiatives.
Since the beginning of the 13th Five-Year Plan, investment in technological innovation in its petroleum business has increased to 2% of the sales revenue of ZhenHua Oil’s overseas oilfield projects, with the aim of reaching 3%.
The technological management method, under the leadership and policy direction of the Science and Technology Committee, utilizes a two-level project initiation and management system divided between ZhenHua Oil headquarters and project companies. This results in a completely connected system where “ZhenHua Oil headquarters controls the whole process from project initialization and reasoning through to supervision and organization, with research entities to executing research assignments for projects and developing innovative findings, while overseas project companies put research findings into practice through field tests and practical application.”
An evaluation system has been established that aims to enhance capabilities in technical innovation by focusing on technical indexes, effective application and project management. A system for the assessment of capabilities in technical innovation has been established to enable comprehensive evaluation in this area.
Performance appraisal is mainly conducted on the final innovation project plans and level attained, on technical innovation results and on the breadth of application of new technologies. In addition, appraisal takes into account the exercise of rights by the technical innovation executive division, project organization, implementation and management, use of direct funds, protection of fundamental data and findings and patent applications and grants, and so on. The appraisal is conducted quarterly, in the interim and at the end of a period in combination with performance assessment.
ZhenHua Oil has built and improved a management system for technical innovation, mainly consisting of the establishment and management of a data room and database. A system for intellectual property rights training has been set up, so that project managers and researchers can build strong awareness in the area of intellectual property protection. A system for the promotion and sharing of technical innovations has also been built so as to speed up the transfer and application of technical developments.