BEIJING: China said it will further open up its oil and gas sector to private investment as it seeks to overhaul an industry still dominated by a handful of state-run firms.
The plan comes as China, the world’s biggest energy guzzler, attempts to ramp up domestic oil and gas production to boost its supply of the vital resources.
The country is heavily reliant on energy imports as domestic production fails to keep pace with growing demand — a problem exacerbated by Chinese companies reducing output following sharp falls in global prices.
The government’s plan would allow state-owned companies to “diversify their shareholder base and introduce mixed-ownership”, enabling privately owned companies to participate in exploration, the State Council, China’s cabinet, said Sunday.
Private enterprises would also be permitted to own and run oil and gas storage facilities.
State-owned oil and gas companies should “keep fit to stay healthy”, the statement said, and “adopt multiple measures to… sort out problems left over from history”.
The announcement, which did not provide a timeframe for the reforms, follows limited efforts to allow private investment in the key sector.
The country’s oil and gas industry is dominated by China National Petroleum Corp (CNPC), China Petrochemical Corp (Sinopec) and China National Offshore Oil Corp — which are often criticised for being inefficient and bloated with too many workers.
“The market should play a decisive role in resource allocation and the government role should be better played in order to safeguard national energy security, boost productivity and meet people’s needs,” the statement said.
China produced 199.7 million tonnes of crude in 2016, down 6.9 percent from the previous year, but that was surpassed by imports of 381 million tonnes, up 13.6 percent.
Natural gas output rose slightly, up 1.7 percent to 136.87 billion cubic metres in the same period. China’s gas imports reached 72.1 billion cubic metres, a rise of 17.4 percent.