China Energy Watch: Foreign Upstream Investors Wanted

China is changing direction in a key aspect of its energy policy, and is now trying to woo foreign investors back into its upstream onshore sector, particularly in the natural gas sector.

This coincides with the failure of one recent effort by China to bridge its widening energy gap – its attempt to buy existing sizable overseas oil and gas assets through CNOOC Ltd.’s (0883.HK) purchase of Unocal Corp. (UCL).

“In recent years, China’s overall energy demand has grown very fast and it’s diversifying its energy source with growing emphasis on clean air,” Shum noted, adding one reason why China needs to speed up domestic gas exploration.

China’s companies may be motivated by a need to use foreign technology and expertise to meet their reserves and productions targets quickly, which would involve giving foreign firms entry to major gas finds in return.

Schlumberger