China will allow foreign companies into the oil and gas exploration and production business in the country, opening up the industry to firms other than state-run energy giants, Reuters reports.
From May 1 this year, foreign firms registered in China with net assets of at least 300 million yuan (US$43 million) will be allowed to take part in oil and gas exploration and production, the Ministry of Natural Resources was quoted as saying at a media conference.
The change will also apply to domestic companies that meet the same asset criteria.
The move comes as part of Beijing’s push to increase oil and gas development and bring private capital into the upstream energy business.
Previously, international companies could enter the industry only via joint ventures or through cooperation with Chinese firms, mainly state-owned majors such as China National Petroleum Company (CNPC), China Petrochemical Corp (Sinopec) or their listed vehicles.
Mineral resources mining permits will be valid for 5 years at initial registration, and can potentially be extended for another 5 years.
When firms apply for extensions, the government will automatically cut the area of the mining/exploration zones by 25 percent from the originally registered level, according to the report.
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