China opens oil and gas exploration to foreign companies
Beijing will open up market from May 2020 in a bid to boost domestic energy supplies
Beijing has officially allowed foreign companies to explore and produce oil and gas in the country in a move to boost domestic energy supplies.
The Chinese Ministry of Natural Resources says the new rules will come into effect on May 1, 2020.
Foreign firms registered in China that have net assets over $43m (£32.7m, €38.6m) will be able to take part in the local oil and gas industry. The same asset criteria apply to domestic companies.
The new mining permits will be valid for five years and could be further extended for the same duration.
Before the move, foreign companies were able to explore and produce oil in the country only in cooperation with Chinese firms. Most of those, such as China National Petroleum Company (CNPC) and China Petrochemical Corp (Sinopec), are state-owned.
Chinese authorities believe that relaxation of the rules will increase the overall production of gas and oil in the country. China imports around 70 per cent of the oil it refines and nearly 50 per cent of the natural gas it consumes.
However, experts suggest that major companies may be put off by the poor asset quality of China’s hydrocarbon resources.
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