Table Of ContentThe Oil and Gas Service Industry in Asia
Palgrave Macmillan Asian Business Series Centre for the Study of Emerging
Market Series
Series Editor: Harukiyo Hasegawa is Professor at Doshisha Business School,
Kyoto, Japan, and Honourable Research Fellow at the University of
Sheffi eld’s School of East Asian Studies, where he was formerly Director
of the Centre for Japanese Studies.
The Palgrave Macmillan Asian Business Series seeks to publish theoretical
and empirical studies that contribute forward-looking social perspectives
on the study of management issues not just in Asia, but by implication
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in Asia, a region which is seen as key to studies of modern m anagement,
organisation, strategies, human resources and technologies.
The series invites practitioners, policy-makers and academic r esearchers
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Titles include:
Glenn D. Hook and Harukiyo Hasegawa (editors)
JAPANESE RESPONSES TO GLOBALIZATION IN THE 21st CENTURY
Politics, Security, Economics and Business
Diane Rosemary Sharpe and Harukiyo Hasegawa (editors)
NEW HORIZONS IN ASIAN MANAGEMENT
Emerging Issues and Critical Perspectives
Sten Söderman (editor)
EMERGING MULTIPLICITY
Integration and Responsiveness in Asian Business Development
Oliver H.M. Yau and Raymond P.M. Chow (editors)
HARMONY VERSUS CONFLICT IN ASIAN BUSINESS
Managing in a Turbulent Era
Tan Yi
THE OIL AND GAS SERVICE INDUSTRY IN ASIA
A Comparison of Business Strategies
Palgrave Macmillan Asian Business Series
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The Oil and Gas Service
Industry in Asia
A Comparison of Business Strategies
Tan Yi
Senior Market Analyst, ODS-Petrodata
© Tan Yi 2010
Softcover reprint of the hardcover 1st edition 2010 978-0-230-23559-5
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First published 2010 by
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ISBN 978-1-349-31400-3 ISBN 978-0-230-27503-4 (eBook)
DOI 10.1057/9780230275034
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A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Yi, Tan, 1966–
The oil and gas service industry in Asia : a comparison of business
strategies / Tan Yi.
p. cm.
Summary: “This book investigates the business strategies chosen by oil and
gas service companies operating in China, Singapore and Malaysia. It provides
an analytical view of the reliability of strategic theoretical frameworks based on
Western business practice but applied in a non-Western business environment like
Asia”—Provided by publisher.
Includes bibliographical references and index.
1. Petroleum industry and trade—China. 2. Petroleum industry and trade—
Singapore. 3. Petroleum industry and trade—Malaysia. I. Title.
HD9576.C52Y5 2010
338.4’7622338095—dc22 2009046800
10 9 8 7 6 5 4 3 2 1
19 18 17 16 15 14 13 12 11 10
Contents
List of Figures xiii
List of Tables xv
Acknowledgements xvii
List of Abbreviations xix
1 Introduction 1
1.1 Research context 2
1.1.1 Defining the oil and gas service industry 2
1.1.2 Oil and gas service sector: East Asia overview 3
1.1.3 Industry selection 7
1.2 Research rationale 8
1.2.1 Typology of the business environment 8
1.2.2 Development of strategy concepts 10
1.3 Research objectives and propositions 13
1.4 Research methodology 15
1.4.1 Questionnaire construction
and research variables 15
1.4.2 Measurement and scales 16
1.4.3 Sampling 19
1.4.4 Data collection 19
1.4.5 Data analysis 20
1.5 Significance of the research 21
1.6 Organisation of the book 22
2 The Energy Service Industry in East Asia 25
2.1 Generic context and background 25
2.2 Petroleum industry review 29
2.2.1 China 29
v
vi Contents
2.2.2 Malaysia 33
2.2.3 Singapore 35
2.2.4 Brief history of major service companies 36
2.3 Key indicators 38
2.4 Service-related petroleum economy 40
2.4.1 Oil price volatility versus steady offshore
rig counts 40
2.4.2 Trends of petroleum economics 45
2.5 Political/regulatory factors 47
2.5.1 China petroleum regulatory environment 47
2.5.2 Malaysia petroleum regulatory environment 49
2.5.3 Singapore petroleum regulatory
environment 49
2.6 Technology factors 49
2.7 Clients of oil and gas services 52
2.7.1 National oil companies (NOCs) 52
2.7.2 Multinational oil companies 54
2.8 Service suppliers 55
2.8.1 National service companies 56
2.8.2 International service companies 58
2.9 Competition in the service sector 59
2.9.1 A framework of industry rivalry 59
2.9.2 Competitive forces 61
2.10 Summary 63
3 Conceptual Frameworks of Business
Environment and Strategies 65
3.1 The conceptual frameworks 65
3.1.1 A generic model for strategic management
processes 66
3.1.2 Business growth-related grand strategies 67
3.1.3 A model of environmental
school analysis 69
3.2 Perceived business environment 71
Contents vii
3.2.1 Importance of analysing the business
environment 72
3.2.2 A typology of environmental dimensions 73
3.3 Concept of strategy 76
3.3.1 A brief review of definitions 76
3.3.2 Major streams of the strategy concept 78
3.3.3 Evolution of strategy: a chronological review 79
3.4 Major streams of business strategy 83
3.4.1 Miles and Snow’s typology of business
strategic directions 83
3.4.2 Porter’s taxonomy of generic competitive
strategies 85
3.4.3 Bowman’s strategy clock: competitive
positions 87
3.5 Conceptual development of strategic performance 88
3.6 Developing theoretical frameworks 90
3.6.1 The assessment of environmental sectors 90
3.6.2 Category of strategies by service companies 93
3.6.3 Taxonomy of competitive strategies 94
3.6.4 Strategic performance assessment 94
3.6.5 The ESP model 95
3.7 Summary 98
4 Perceived Business Environment in China,
Singapore and Malaysia 101
4.1 Background context 101
4.1.1 Company profiles 101
4.1.2 Industrial segments of the energy
service sector 104
4.1.3 Geographical presence in Asia 105
4.1.4 Years in business 106
4.1.5 Ownership 107
4.2 Assessing task environment segments 110
4.3 Managerial perceptions on the business
environment 113
viii Contents
4.3.1 Preliminary observations of environmental
dimensions 113
4.3.2 Factors reflecting perceived complexity 116
4.3.3 Factors reflecting perceived hostility 118
4.3.4 Factors reflecting perceived dynamism 121
4.4 Associations of business environment dimensions 122
4.4.1 Correlations of uncertainty, complexity,
dynamism and hostility 123
4.4.2 Perceived environmental uncertainty
and environmental factors 125
4.4.3 Environmental dimensions and factors 128
4.5 Cross-national comparisons 135
4.5.1 Conditions in China, Singapore
and Malaysia 135
4.5.2 Comparisons of China, Singapore
and Malaysia 138
4.6 Summary 140
5 Business Strategies in China, Singapore and Malaysia 143
5.1 Business strategies adopted by service companies 143
5.1.1 Generic business strategies employed
by oil and gas service firms 143
5.1.2 Trends of competitive strategies 144
5.1.3 Strategic competitive positions 145
5.2 Key competitive factors in the service industry 147
5.3 Strategic performance 148
5.4 Cross-national comparisons of strategic options 151
5.4.1 Business strategies employed in China,
Singapore and Malaysia 151
5.4.2 Competitive strategies in China,
Singapore and Malaysia 153
5.4.3 Cross-national comparison of strategic
positions 156
5.5 Cross-national analysis of strategic performance 159
5.5.1 An overall view of strategic performance 159
Contents ix
5.5.2 Comparisons of strategic performance
in the three selected countries 160
5.6 Summary 163
6 The Business Environment, Strategy
and Performance 165
6.1 Business environment and strategy alignment 166
6.2 Environment and strategic performance
relationship 172
6.3 C omparisons of strategic performance
by strategic groups 176
6.3.1 Strategic performance with business strategies 176
6.3.2 Strategic performance with competitive
strategies 178
6.3.3 Strategic performance with strategic positions 184
6.4 Cross-national correlation comparisons 188
6.4.1 Cross-national strategy–performance
association 188
6.4.2 Cross-national environment–performance
relationships 197
6.5 Cross-national comparisons: differences 200
6.5.1 Difference of uncertainty by business
strategies 200
6.5.2 Differences of performance by business
strategies 200
6.6 Summary 203
7 Recent Trends of the Energy Service Industry
in East Asia 207
7.1 Overview of the business environment in 2002–9 207
7.1.1 Reduction in demand for services and
downturn of service activities 209
7.1.2 Tightening credit market conditions’ adverse
impact on all oil and gas participants 210
7.1.3 Smaller-sized service contractors’ struggle
to maintain activities 210
7.2 Recent trends of business conditions in East Asia 211
