Massively overstaffed, PetroChina cut 38,400 of its workforce last year, saving $92 million. An additional 13,000 are to go this year.
PetroChina aims to cut $1.1 billion in annual costs by 2002. It has already achieved 45% of its target, and last year took an $800 million charge for closing six money-losing refineries, 105 chemical facilities, and many other business units.
All new projects must yield at least a 12% annual return on investment. Last year, return on capital jumped from 10% to 16% as PetroChina dumped unprofitable units and used IPO proceeds to slash debt. In 2000, its chemical businesses were profitable for the first time.
By weeding out weak facilities, capacity utilization for refineries jumped from 68% in 1999 to 78% in 2000.
Data: PetroChina, BusinessWeek