Abstract: The petroleum companies have popularized cost managementsince 1999,it has become necessary to research the theory about cost management. The first part of this paper introduces the formation of the responsibility and forms. The second part explains how the cost is operated. The third part discusses four principles that the petroleum companies must follow when they set up a cost management. The four principles are that the responsibility of the cost management must be definite, the pay must consider the performance, the cost center’s authority must be equal to its responsibility and only examine the cost center’s controllable cost. The forth part puts forward six indicators of a successful cost center of a petroleum companies. The cost center must have a reasonable structure and it must give the cost strategic, all-sided, general and principal control and its basic work of cost management must be all-around.