Great changes have really come! National Oil and Gas Reform

Recently, China's oil and gas reform has made significant progress again! The National Development and Reform Commission (NDRC) has adopted a resolution which calls for "liberalizing access restrictions for oil and gas exploration and exploitation this year, actively attracting social capital and intensifying oil and gas exploration and exploitation efforts". At the same time, the National Development and Reform Commission announced that it would cancel the "examination and approval of the overall development plan for oil and gas (coalbed methane) foreign cooperation projects" and change it to the record.

This also means that the pattern of oil and gas exploration in China, which is dominated by central and state-owned petroleum enterprises such as PetroChina, Sinopec, CNOOC and Yanchang Petroleum, will be broken in one fell swoop. Private enterprises and foreign oil and gas enterprises will have great opportunities for development! At the same time, the development enthusiasm and progress of foreign oil and gas cooperation projects will be greatly enhanced!

China is expected to set off another wave of oil and gas exploration and development!

Speed-up Reform of Upstream Oil and Gas System

In recent years, the reform of the upstream oil and gas system has been accelerating.

The competitive transfer of oil and gas exploration rights in Tarim Basin in 2013, the public bidding transfer of exploration rights in oil and gas exploration blocks in 2015, and the public transfer of exploration rights in five oil and gas exploration blocks by listing in 2018 all demonstrate the acceleration of market-oriented reform in oil and gas upstream areas.

In addition, in the process of oil and gas exploration and exploitation reform, Sinopec, PetroChina and CNOOC also made way.

At the Xinjiang Land and Resources Work Conference in 2017, the three barrels of oil agreed to withdraw from the 300,000 square kilometers, nearly 30 oil and gas exploration blocks in Xinjiang and invite public bidding.

In mid-2017, PetroChina formally started the internal circulation of mineral rights in eastern and Western oilfields. In January 2019, PetroChina launched the second batch of internal transfer of mining rights. On the basis of the internal circulation of the first batch of mining rights, the second batch increased the area of the circulation blocks by 100,000 square kilometers, and the total area of the circulation blocks was 150,000 square kilometers, accounting for 15.2% of the total land exploration rights.

It is worth noting that this transfer of mineral rights will start the mode of block foreign cooperation. PetroChina has selected 13 blocks and 12,000 square kilometers of mining rights as risk cooperation blocks with external enterprises. Through risk cooperation with engineering and technical service enterprises, the technical strength of China's petroleum oil service enterprises will be brought into full play; through risk exploration cooperation with external enterprises, the cooperation mode of mixed ownership will be explored, data facilities will be shared, and the exploration process of small and medium-sized basins will be accelerated.

Moreover, in order to ensure the smooth progress of reform in the oil and gas field, important measures have been taken in China.

In May 2017, the State issued Several Opinions on Deepening the Reform of Petroleum and Natural Gas System, allowing market participants who meet the requirements of access and obtain qualifications to participate in conventional oil and gas exploration and exploitation. This marks the beginning of the reform of oil and gas system.

From "allowing market participants who meet the requirements of access" two years ago to "liberalizing access restrictions and actively attracting" today, the change in expression reflects the further deepening of the reform of upstream oil and gas system. The liberalization of upstream access will be an important turning point for the development of domestic oil and gas industry. The new competition pattern of state-owned enterprises, private enterprises and foreign enterprises in the whole oil and gas industry chain is expected to gradually take shape. State-owned enterprises, which have long dominated upstream exploration and development, will also face new challenges and opportunities.

Promoting cooperation between Chinese and foreign oil and gas enterprises

In order to speed up oil and gas foreign cooperation, in addition to the reform of the relevant system mentioned above, in recent years, the NDRC has also taken major measures: canceling the approval of the overall development plan of oil and gas foreign cooperation projects.

After the overall development plan of oil and gas foreign cooperation projects has been revised from examination and approval to filing, the overall development plan of oil and gas fields only needs to fill in necessary information on the Internet according to the requirements of "Approval and Recording Management Measures for Enterprise Investment Projects". Compared with the examination and approval, the time of project filing will be shortened considerably, and the enthusiasm of oil and gas enterprises will be further mobilized, which will be conducive to further facilitating cooperation between Chinese and foreign oil and gas enterprises. It is conducive to further opening up and actively utilizing foreign capital.

Whether liberalizing the access restrictions for oil and gas exploration and exploitation or canceling the examination and approval of the overall development plan for oil and gas foreign cooperation projects will bring great opportunities and challenges to the oil and gas industry. In order to make profits in this reform, we must fully prepare for the new pattern of competition in the oil and gas industry chain.