<p align="justify">CNOOC- China National Offshore Oil Corporation is incorporated with its group in Hong Kong Special Administration Region in 1999. The company is listed in New York stock exchange and Hong Kong stock exchange. CNOOC is one of the biggest national oil companies of China, ranked as third biggest company. First two are CNPC, and China Petrochemical Corporation. CNOOC Group majorly focuses on exploration, exploitation and crude oil development. It also deals in natural gas exploration in the offshore China with COOEC’s subsidiary. The company is state-owned, hence, working its best to provide good services to customers (CNOOC ltd, 2019).</p>
<p align="justify">Every company faces competition no matter in what industry it is operating or owned by government or individuals. CNOOC is also facing competition in the oil and gas industry, not only with local companies, but from multinationals too. Industrial analysis is necessary for the company. Porter’s five forces model helps the company in identifying the competition level in the industry. It identifies the strategic position of the company. Thus, making the strategic decisions easier for them. It also looks on the opportunities which can be avail by the company. Here is the detailed Porter five forces model of CNOOC;</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The buying power of customer is low in the oil and gas industry across the globe. Oil and gas are the necessity, as these elements are required in almost everything. The customers of oil and gas vary from government users to large corporation and individual users. This has increased the demand of fuel. The high global consumption rate increases the prices in oil industries. This brought little control of customers over prices. Consumers have to purchase it any cost as it’s a necessity product. Moreover, because of the increase in refining costs, companies are now transferring the costs on consumers by increasing the prices. Thus, consumers will purchase it any cost until the substitute will be available (Badsha, 2014).</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Suppliers are considered as one of the major stakeholders of the company. However, in the oil and gas industry, the suppliers’ bargaining power is medium. Companies are vertically integrated in the industry. Many of them require service companies as suppliers, who can provide technical services and equipment. CNOOC is involved in exploration of oil and gas, therefore, it needs technical suppliers who can provide equipment for exploration. There are few suppliers available in industry, but CNOOC is a big company, hence limited supplier bargaining power is present. However, the company maintains good relationship with its suppliers to achieve the economies of scale (Hokroh, 2014).</p>
<h2 align="justify">Threats of New Entrants</h2>
<p align="justify">Threats from the new entrants are high in the oil and gas industry from both local and international firms. China is growing rapidly and due to high profit margins, many new entrants want to operate in there. In addition to this, the capital costs of operating in industry is astronomical along with the production and exploration costs. New firms have to arrange the capital in order to compete with the giants in the market like CNOOC. Moreover, integrated oil and gas companies have different competitive advantages. Mainly in technical expertise like extraction or exploration, financial areas, operating areas etc. New entrants have to develop strong brand image and name along with huge customer base to operate in the country (UK Essays, 2018).</p>
<h2 align="justify">Threats from the Substitute Products</h2>
<p align="justify">Threats of substitute products are medium to high for CNOOC as it is operating in the oil and gas industry. There are few substitutes available in the industry. with the emerging technology, people are moving towards renewable energy sources. There is biofuel, solar energy, wind energy, etc. but still no replacement of oil is found yet. Biofuel is used as a substitute, but not as a major threat to the industry. People are discovering more and more substitutes to save the renewable energy resources. Thus, CNOOC is working its best to provide more oil and gas to its consumers and lead the market (Badsha, 2014).</p>
<h2 align="justify">Rivalry of Existing Players</h2>
<p align="justify">CNOOC is vertically integrated in the oil and gas industry and has many competitors. The competition is intense in the oil and gas industry in China from both domestic and international companies. Some of the competitors are China Petrochemical Corporation, CNPC, Shell, Exxon, etc. The competition level for the company is medium to high. Many of the firms have specific markets for selling the products. They do not have major differentiated item other than a brand name to have loyal consumers. Mainly competitors differentiate their products with the additives. However, it is necessary for CNOOC to increase its marketing techniques and consumer base (Hokroh, 2014).</p>
<h2 align="justify">References</h2>
<p align="left">Badsha, J. 2014. Strategic Analysis of Nexen CNOOC Limited. [Online], Available at: <a href="https://www.academia.edu/9638590/Term_paper_on_Nexen_CNOOC_Ltd_by_Jeener_Badsha">https://www.academia.edu/9638590/Term_paper_on_Nexen_CNOOC_Ltd_by_Jeener_Badsha</a>, [Accessed on: 23rd December, 2019].<br />
CNOOC ltd, 2019. Company Profile. [Online], Available at: <a href="https://www.cnoocltd.com/col/col7261/index.html">https://www.cnoocltd.com/col/col7261/index.html</a>, [Accessed on: 23rd December, 2019].<br />
Hokroh, M. 2014. AN ANALYSIS OF THE OIL AND GAS INDUSTRY’S COMPETITIVENESS USING PORTER’S FIVE FORCES FRAMEWORK. [Online], Available at: <a href="https://www.longdom.org/articles/an-analysis-of-the-oil-and-gas-industrys-competitiveness-using-porters-five-forces-framework.pdf">https://www.longdom.org/articles/an-analysis-of-the-oil-and-gas-industrys-competitiveness-using-porters-five-forces-framework.pdf</a>, [Accessed on: 23rd December, 2019].<br />
UKEssays. 2018. Michael Porter’s five forces: Oil industry. [Online]. Available at: <a href="https://www.ukessays.com/essays/management/analysis-of-michael-porters-five-forces-management-essay.php?vref=1">https://www.ukessays.com/essays/management/analysis-of-michael-porters-five-forces-management-essay.php?vref=1</a>, [Accessed on: 23rd December, 2019].</p>