Chinese energy companies, not threatened with foreign investors, welcomed the Chinese government's decision to attract capital and advance the country's reform on its energy systems by having a no joint venture agreement.
Citing this move as putting impetus in China's gas and oil production, Lin Boqiang, director at Xiamen University of China Centre for Energy Economics Research said, "China boasts advantages in technologies of exploring conventional oil and natural gas but lags behind some foreign counterparts in unconventional exploration," Lin said.
Thus, it is "necessary to promote international cooperation in the unconventional sphere," he added.
According to China National Petroleum Corporation, the country is the largest importer of natural gas and crude oil. Its dependency in 2018 for crude oil is at 69.8 percent and its dependency for natural gas was at 45.3.
The announcement of the plan to remove the joint venture requirement for foreign companies wanting to invest in China's gas and oil industry came as the country opens up to industries as part of its measures in its ongoing trade discussions with the US.
The removal of the joint venture requirement came with the provision that only local firms can control gas networks in cities with populations over half a million, according to the Chinese National Development and Reform Commission.
China's opening-up was highly welcomed by the leading overseas energy companies who have been expecting an easier and wider market access in China.
Yang Xiaoping, president of British Petroleum (BP) (China), agrees this move will boost the Chinese energy market and create a more fair and open business environment and accelerate the technological upgrading of the country's oil and natural gas exploration.
The removal of "market restrictions" will facilitate China's quest "into a low-carbon development model" Yang added.
Shell Company's executive chairman in China, Zhang Xinsheng, was encouraged with this market reform and describes the opening-up as "inspiring" giving the country broadened market access, more business opportunities and more investment options.
Zhang mentioned that Shell will continue bringing its cutting-edge technologies and professional capabilities to the country.
Shell has a shale oil business with Sinopec to study the potential development of shale oil in eastern China.
China's efforts to open itself up to foreign investments brought it US$138.3 billion in 2018. In the first five months of 2019, it already has $54.6 billion foreign direct investment (FDI) inflow.
