Chinese Government Lifts Restrictions For Foreign Companies To Acquire Oil & Gas Blocks The Chinese Government announced the lifting of a series of restrictions on foreign investment on June 30, 2019, with the new policies becoming effective July 30, 2019. Two of the key oil & gas restrictions lifted are foreign direct investment in the upstream oil & gas sector and the city gas distribution sector. Here we focus on the changes to the upstream oil & gas sector, which allows foreign companies to operate fully owned entities to hold oil & gas blocks in China. Chinese NOCs The Chinese domestic upstream oil & gas sector is dominated by the four Chinese National Oil Company (NOCs) — China National Petroleum Corp (CNPC), China Petroleum & Chemical Corp (Sinopec), China National Offshore Oil Corp (CNOOC), and Shaanxi Yanchang Petroleum Group (Yanchang). Access to oil & gas blocks for local companies and international companies is strictly through entering into a production sharing contract joint venture with any of these four companies. Fig .1 NOC held acreage Declining Production and Increasing Demand The latest policy of allowing international companies to directly participate in the upstream sector is an attempt by the Chinese Government… continue reading
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Source: CTRM Center