The CPC Corporation, Taiwan (CPC) enjoyed a steady growth last year, with its operating revenues reaching a record high of NT$776.8 billion, while the domestic sales of petroleum products and natural gas grew steadily, exceeding the targets that had been set for the year. The growth has been attributed to the long-term assistance and care of its domestic and overseas customers and partner-companies.
“As we advance on our quest to become an international energy group that encompasses petroleum products, petrochemicals and high technology, this assistance and care will continue to be our greatest supporting force,” Wenent P. Pan and B. L. Chen, CPC chairperson and president, respectively, said in the company’s annual report. CPC registered growth despite setbacks, such as the rise in the price of crude oil, which reached a historic $77 per barrel. As a state-owned enterprise, CPC was not able to fully pass on the costs resulting from the high level of crude oil prices throughout the year.
Another problem was the stoppage of work on the Third Naptha Cracker upgrading project because of protests by neighboring residents and environmental groups. To break out of this difficulty, the Ministry of Economic Affairs set up a special task force which, together with CPC, strove to carry out project modification, strengthen communication with the public, and promote local payback schemes.
With international oil prices on the rise in recent years, CPC has moved to gain control of its own sources of petroleum and upgrade its overall operating performance by vigorously developing upstream operation and coordinating with the government’s policy of “deepening the Energy Supply Security Mechanism and Promoting International Agency Cooperation” by engaging in international cooperative exploration in the hope of discovering new oil and gas reserves. Besides stabilizing production in cooperative oil fields in Indonesia, Ecuador, and Venezuela in 2006, CPC succeeded in acquiring the BCOIII, BCSII, BLT I fields in Chad and the Jaguar and NW B.S. fields in the United States.
At the end of the year, it also successfully bid for the Murzuq 162 field in Libya. In addition, as the exclusive supplier of natural gas to the domestic market, CPC renewed its contract with RasGas II company of Qatar for the purchase of LNG and, in 2006, signed a long-term LNG carrier lease contract with the NiMic shipping company of Japan. The three LNG storage tanks that it contracted from Mitsubishi Heavy Industries have won certificates of conformity and been put into use. These achievements have greatly enhanced CPC’s ability to provide stable supply of natural gas.
With its reliance on imports for the vast majority of its energy needs, CPC has always devoted its efforts to the provision of a stable supply to fill domestic demand, the development of core businesses, and the expansion of operating scale. In the future, it will continuously strengthen international cooperation in oil and gas exploration, upgrade deep-well techniques so as to increase oil and gas production from operating fields.
It will also reinforce the control of unplanned plant stoppages, vigorously implementing the Taichung Habor LNG receiving terminal. Other priorities include refining structural improvement, Third Naphtha Cracker renovation, and Kuo Kuang Petrochemical Technology Corp. projects; reinforcing the market information and customer service management systems and implementing the floating oil-price mechanism as well as self-service filling stations.
The value-added CPC VIP card will also be heightened. CPC will form cross-industry alliances and develop multidimensional businesses, expand the use of natural gas, and seek out low-cost gas sources to enhance its competitive capabilities. It will also carry out R&D innovation, provide high-quality oil and gas products and carry through with the provision of high-quality customer-oriented services to consolidate its position as market leader.
To achieve its goals, CPC will adjust its organizational framework to accommodate changes in market competition and the operating environment, and will promote a sharing type of business to achieve a more flexible, more effective implementation capability.
In line with the government’s policy of reinforcing corporate governance, CPC will follow the relevant laws in forcibly implementing a system of corporate governance and will take full advantage of the professionalism of directors and supervisors in order to achieve the important corporate governance principles of “reinforcing the functions of the board of directors”, “utilizing the functions of supervisors,” “strengthening of internal auditing,” and “disclosure of important information” in the hope of enhancing the company’s competitive and risk-control capabilities and strengthening its operations.”
Industrial safety, environmental protection, and social responsibility are the cornerstones of sustainable corporate development, and in recent years the employees of CPC have incorporated the concept of “100 percent safety, zero accidents” in daily operations.
In 2006, the company’s overall index record dropped to 1.39, a record low, and CPC workers suffered no job-related traffic accidents, either inside or outside of plants. This has fulfilled commitment to “make CPC into a safe organization and provide a guarantee of safety for the community environment in all operating activities.”
In its efforts to protect the environment and achieve sustainable operations, CPC is vigorously promoting the reduction of greenhouse gas emissions in response to the Kyoto Protocol; in 2006, CPC cut emissions of carbon dioxide by 400,000 metric tons, thus achieving the preset target. To improve domestic air quality, CPC moved in advance of environmental regulations by reducing the sulfur content of its diesel fuel from 375 ppm to just 50 ppm in June of 2004 and introduced high-quality gasoline with a sulfur content of 50 ppm on Jan. 1, 2007.
To heighten the safety of energy supply and clean up energy use, the company moved vigorously into the exploration of gas hydrate as well as the development and promotion of renewable and alternative energies, such as biodiesel and gasohol. At a time when global petroleum resources are becoming exhausted, CPC is eager to continue serving faithfully in its role as Taiwan’s main producer and supplier of clean energy, thus creating a win-win-win situation for “environmental protection”, “economic development”, and “energy utilization.” To live up fully to its corporate social responsibility, CPC will continuously voice concern for local development and will enter the ranks of those who “adopt” parks, mangrove forests, rivers and endangered species. It will also assist with environmental garbage cleanups, the rectification of ocean pollution, and other such activities so as to leave a clean environment for future generations.
Sustainable Development
Since its establishment 60 years ago, CPC has been dedicated to the mission of providing a stable supply of oil and petroleum products, and providing impetus for the development of petrochemical-related industries and the growth of the national economy.
Established in Shanghai on June 1, 1946, CPC was funded and operated by the government under the direction of the Resource Committee (the forerunner of the state-owned Enterprise Commission, Ministry of Economic Affairs). In 1949, CPC followed the government in relocating to Taiwan, setting up headquarters in Taipei under the direction of the Ministry of Economic Affairs.
