Evaluation of Cost Management Controlling System in Petroleum Enterprise

In this paper , for the implementation and supervision of the strategic management, we proposed a model that will evaluate cost management controlling system under various market scenarios in petroleum enterprises. The outlined model classified cost controlling methods into five grades In the different strategy. These methods includes origin man- agement, activity improvement, activity chain optimization, value engineering, cost variance analysis, budget manage- ment, performance evaluation system and incentive mechanism, quality cost management, funds operation and human capital operation. The model assigned a value to each grade by expert scoring method, and calculated the score of cost management controlling system by formulas. It is the conclusion that if the score > 0, cost management controlling system made positive contribution to strategy; If the score < 0, negative contribution to strategy. The use and benefits of the pro- posed model are illustrated on a case of The Fourth Oil Extraction Plant of Daqing Oilfield Company Limited..