China wants to open its oil and gas sector to foreign companies this year, thereby boosting the country’s energy supply. For the first time, not only the state-owned energy giants, but also foreign companies in China can search for and extract oil and gas.
Until now, international companies had to participate in a joint venture to extract raw materials in the country. According to experts, the interest of global drilling companies is likely to remain limited for the time being due to the overall poor resource quality in China.
Released in May
The oil and gas market will open on May 1 for foreign companies registered in China with net worth of 300 million yuan, the Ministry of Natural Resources announced today. The change also applies to domestic companies that meet the same conditions. The authorization is valid for five years when registering for the first time and could possibly be extended by five years.
„China is accelerating the reform of its sector as concerns about energy security increase,“ said Zhu Kunfeng, who is responsible for upstream research at the IHS Markit Institute in Beijing.
China now imports 70 percent of the crude oil it processes and almost half of its natural gas consumption. State-owned companies are struggling to increase reserves and production outside the country in the face of growing geopolitical risks.
