Panjing Dongxing Oil Well Measure Service Co. Ltd. v. PetroChina Inc.
Analysis Group was retained by Panjing Dongxing Oil Well Measure Service Company Ltd. (Panjing), the plaintiff in a dispute alleging claims of monopolization, abuse of market power, and refusal to deal. Panjing, a privately owned oilfield steam injection services provider in Liaoning, China, entered into an agreement with the defendant, PetroChina Inc., a state-run oil and gas exploration and production company, to provide steam injection services with its two fixed boilers. Panjing alleged that PetroChina exercised its monopsony power in the market for oilfield steam injection services and abused its power through price discrimination and refusal to deal, harming competition and causing damages to the plaintiff.
A team comprising native Mandarin speakers from three Analysis Group offices in the US, as well as its Beijing office, supported our affiliate Wei Tan, an antitrust and competition expert with a focus on China. The team – led by Vice President Na Dawson and including Associate Rongzhang Wang and Analysts Yuan Feng, Eric Li, and Sam Yu – researched the characteristics of the types of steam injection equipment used in oil fields in China and their historical prices and operating costs. The team also analyzed whether certain types of equipment were substitutable for others. Dr. Tan filed two reports in Chinese with the Beijing Intellectual Property Court. In them, he opined that the defendant had the power to dictate the prices and contract terms of fixed boiler steam injection services for the oil field under development, a conclusion further supported by a monopsony test.