March 2016, Vol. 243, No. 3
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Is China About To Open Up Its Oil Industry?
Brief but extremely interesting note from China this week. Suggesting that an unparalleled opportunity in the energy space may be coming available here.
That’s in the Chinese oil and natural gas industries. Where it appears the government may be about to open up former government-only sectors to outside investment, for the first time ever.
That was the plan outlined by the head of the National Development and Reform Commission (NDRC), Xu Shaoshi, at a press conference in Beijing yesterday. With this influential official saying that China will launch pilot programs for “mixed ownership” in oil and gas industries currently run by state-owned enterprises.
The NDRC chief didn’t specify what exact oil and gas opportunities might come open for outside investment. But the mere suggestion of such a strategy is intriguing — and could mean openings coming in the Chinese E&P sector, pipelines, services, and other ancillaries.
The news of the mixed ownership program was particularly interesting in light of another announcement from China last week. Where one of the country’s biggest oil and gas players said it is offering up a slate of offshore drilling opportunities for foreign partners.
That was China National Offshore Oil Corp (CNOOC). Which has reportedly offered 18 offshore blocks in Chinese waters for tender.
According to Reuters, the licenses on offer include acreage in the Bohai Bay, South Yellow Sea, Pearl River Mouth, Yinggehai, and Qiong Dongnan basins. With some of the blocks covering deepwater plays — where CNOOC will reportedly offer preferential terms to attract skilled partners.
Bidders for the blocks will be able to attend an upcoming data room in Tianjin, Shanghai, Guangzhou, and Zhangjiang. And then purchase further information on the tendered blocks — ahead of an October 31 deadline for bids.
All of which is extremely interesting in its timing — seeming to support the statements from the NDRC that China is serious about bringing the private sector into former state-only ventures in oil and gas. Watch for announcements on further energy investment opportunities across China.
Here’s to new China hands
By Dave Forest, oilprice.com
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