It’s reported that the opening up of China oil and gas up-stream fields dates back to 1980s. Till now China has cooperated with 46 international oil companies in 10 nations and regions in succession, introduced more than 150 technologies and on aggregate produced crude oil of 22 million tons and natural gas of 2.5 billion cubic meters. At present, PetroChina has 16 projects cooperating with foreign oil companies including Royal Dutch Shell, French Total and American ConocoPhillips.
Actually, since the opening up of up-stream exploration and production fields in Chinese oil industry, China has gained foreign capital of more than 10 billion USD, most of which is concentrated on offshore oil zones. And there are only 56 foreign oil contracts on land in total held by PetroChina and Sinopec.
At present China National Offshore Oil Corporation has signed over 150 oil contracts with foreign oil companies, acquiring most of the foreign investment. And foreign oil contracts on land altogether held by PetroChina and Sinopec reach up to 56. Year 1983 and 1993 are the 2 peak periods for signing foreign offshore oil contracts respectively.
According to the commitment made by Chinese government when entered the WTO, in December 2006 China would fully open up its wholesale markets. Then China would further open up its oil industry.
Experts of the fields recently said, with the promotion of foreign middle and small scale oil companies, foreign investment has kept entering up-stream exploration and production fields in Chinese oil industry. In the future years, foreign oil companies will enter their third harvest period in China, mainly in hot fields of offshore oil industry.
In 2005, foreign oil companies signed the 3rd most contracts in history with Chinese counterparts. In the following years, they will enter a big harvest period in terms of risk exploration and business discovery.
In the latest round of bid on oil zones, foreign middle and small scale oil companies got most of the contracts. Insiders indicated that huge investments given by foreign large-scale oil companies in earlier years to up-stream exploration fields in Chinese oil industry provided good opportunities to middle and small scale ones. The service quality and facilities have been improved. Because they are more efficient and flexible, middle and small scale oil companies will be the main foreign exploration force.
On the other hand, in 2006 government approved of opening up 9 risk exploration zones in Tarim Basin covering totally 110,000 square km to international oil companies. International bids will adopt the conventional production sharing contracts pattern. Zones opened up are mainly located in Southwest of Tarim Basin, for most of which it’s the first time to cooperate with the abroad. At present, several large international oil companies including French Total have shown interest in these zones.
It’s said that a few oil and gas pipelines including West-East natural gas transmission project have operated one after another, which provides outlets for the affluent oil and gas resources in Tarim Basin and is the direct drive to promote companies to explore and develop the region on large scale.
Up-stream exploration fields in Chinese oil industry have always been controlled by three oligarchies: PetroChina, Sinopec and CNOOC. Not only could private capital be involved, but state-owned capital outside the three oligarchies is difficult to get involved. However, possessing advanced exploration technologies, although they cooperated with the three oligarchies before, foreign oil companies had never been involved in such rich ore belt as Tarim Basin.
“In this sense, this time government’s approval of foreign oil companies seeking oil in Tarim Basin indicates the opening up of up-stream oil resources. It’s a milestone.”, said an expert.
