Fresh approach brings rewards

Fu Chengyu, chairman of Asia's largest petroleum refiner China Petroleum and Chemical Corp or Sinopec Group. China Daily

Strategic thinking, clear vision give Fu Chengyu an edge over peers

At first glance, Fu Chengyu hardly looks like the top executive of a multi-billion dollar Chinese energy giant that is making a name for itself with its global deals. With his thick eyebrows, dark skin and old-fashioned jacket, the 63-year-old Fu hardly looks like the top executive of the 605 billion yuan ($97 billion) China Petroleum and Chemical Corp or Sinopec Group.

But appearances can often be deceptive, something that I realized after dozens of interactions with him at various forums. The genial and affable Fu has insights and vision on what the energy industry needs to do for achieving sustainable growth in China.

My closest interaction with Fu was in March 2013 when I attended the annual "two sessions", an event where top executives are not allowed to bring assistants or secretaries. Fu was the host of the economic group discussion on that particular day and I secretly passed a note to him, requesting some time for an interview. I saw more than 10 similar notes asking for interview opportunities in his hands.

Fu, however, obliged and spoke to me briefly in a corner by the staircase after the group discussions. What I remember most from that interaction was the polite, logical and focused replies to the questions posed to him.

Unlike many of his peers in State-owned companies, Fu has always believed in being more open and direct.

Qu Jian, an independent energy analyst, said Fu can be very talkative, especially on topics that are close to his heart, such as outbound acquisitions. "I still remember that nine years ago, Fu talked about CNOOC-Unocal acquisition with the Chinese media for over seven hours, a feat among business leaders," said Qu, adding that he was part of that interaction and could feel Fu's passion for taking that deal forward.

Before Fu was appointed chairman of Sinopec in 2011, he was the head of China's largest offshore oil and gas producer China National Offshore Oil Corp or CNOOC. In 2005, he spearheaded an $18.5 billion acquisition of US-based Unocal Corp, which was one of the country's earliest bids in the oil industry.

Although the deal was not completed due to various reasons, including strong opposition from the US government, Fu, along with CNOOC, managed to catch the eyes of the global oil industry.

"He talked about many details of the acquisition, like a participant in each step," said Qu.

Han Xiaoping, chief information officer of China Energy Net Consulting Co Ltd, a consultancy, said Fu has always focused more on profitability, an asset that makes him more than qualified as a professional CEO, rather than as a leader of a State-owned enterprise. In China, heads of most State-owned companies are treated like government officials in some way or the other.

But Fu, running his operations like a foreign company CEO, is more concerned about the company's performances rather his own career ladder, Han said.

"He is extremely innovative and strong-mind, ed," Han said. "When he decides to do something, he will be committed and focused."

In the past three years, shale gas has been a hot word in China's energy industry. Almost every company in the energy sector wants to be part of the industrial chain. However, there have also been doubts that China's geography and water conditions are not suitable for shale gas exploration.

Technology, water consumption and high costs have all been cited as obstacles for China's shale gas "revolution". But Fu does not believe so. His stewardship has helped Sinopec start commercial production from its shale gas blocks in Fuling gas fields in Chongqing.

Fu said the company has made several technology breakthroughs for shale gas exploration in Fuling that can be replicated by other Chinese companies.

Sinopec plans to build an annual capacity of 10 billion cubic meters of gas output by 2017 in Fuling.

Han said the company had failed twice in its earlier attempts before starting commercial production.

Rather than giving up, Fu decided to continue investing in the shale gas sector, Han said. "Despite stiff opposition and high costs, Fu was so determined to succeed and in the end was proved right."