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China removes barriers to foreign investment in upstream
POLICY
THE Chinese government has committed to loosening its restrictions on foreign investment in the upstream and natural gas distribution sectors following an agreement with the US to resume trade talks.
US President Donald Trump and Chinese President Xi Jinping agreed to the resumption of talks at the G20 summit in Japan on June 29.
Trump had threatened to impose additional tariffs on $300bn worth of Chinese imports in the run-up to their meeting, but said a erwards that negotiations were “back on track” and he was happy for them to continue “for the time being”.
On June 30, Beijing published its annual list that outlines which sectors are o -limits to for- eign investment. In addition to removing limita- tions on oil and gas exploration and production, which will mean that companies will no longer have to partner with a local upstream partner, Beijing has also opened up the piped gas sector in cities with more than 500,000 residents.
e changes outlined in the central govern- ment’s latest list will come into e ect on July 30.
“Shell nds progress in the opening-up [of the] upstream sector very encouraging, as it means more choices and more options for us to invest in the sector and in the nation,” the state- run China Daily quoted Shell Companies in China executive chairman Zhang Xinsheng as saying on July 2.
BP China chairman and president Yang Xiaoping said: “Eliminating the restrictions on joint ventures and co-operation in oil and gas
exploration and development, plus introducing multi-market entities [including foreign com- panies] in domestic oil and gas resource explo- ration and development, will enhance market activity, create a fair and open access environ- ment, and help to further enhance the explora- tion and development e orts and technological advances of domestic oil and gas resources.”
While the limitations have been removed, foreign players will still need to seek government approval for any proposed investment.
Beijing also removed or eased restrictions on such sectors as transport, infrastructure, agricul- ture, mining and manufacturing.
e move comes as China and the US seek a resolution to their ongoing trade war. However, it has also come two days a er Beijing restated its objections to what it calls Washington’s “unilat- eral” sanctions on Iranian oil exports.
Attending a meeting of delegates from Iran, Russia, China, the UK, France and Germany in Vienna on June 28 to discuss the Iran nuclear deal, senior Chinese Foreign Ministry o cial Fu Cong told a press conference that Beijing was committed to maintaining economic and trade relations with Iran.
Fu, the director-general of the ministry’s Department of Arms Control, said China rejected the “unilateral imposition of sanc- tions, and for us energy security is important”. Responding to a question about whether China would buy Iranian oil, Fu said: “We do not accept this zero policy of the US.”™
Japanese firms buy 10% stake in Arctic LNG 2
FINANCE & INVESTMENT
RUSSIAN natural gas developer Novatek has agreed to sell a 10% stake in its Arctic LNG 2 project to a consortium of Japanese rms.
State-owned Japan Oil, Gas and Metals National Corp. (JOGMEC) and Mitsui & Co will buy the stake through their Dutch-based joint venture Japan Arctic LNG, in which JOGMEC owns 75% and Mitsui holds 25%.
Total investment in Arctic LNG 2 is projected at $21-23bn.
Following the deal, Novatek will own 60% of the project, with France’s Total, state-run China National Oil and Gas Exploration and
Development Co. (CNODC) and CNOOC Ltd each holding 10%.
Russian President Vladimir Putin told reporters on June 29 that Japanese invest- ments in the project would reach almost $3bn. The Japanese government, mean- while, has called the project a centerpiece of the East Asian country’s economic co-oper- ation with Russia.
Arctic LNG 2, which will be Novatek’s third LNG project, is anticipated to start up by around 2022-2023 and will have a capacity of 19.8mn tonnes per year (tpy).
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w w w . N E W S B A S E . c o m Week 26 03•July•2019