According to Liu Keyu, the deputy director of the centre, “Foreign oil companies are pessimistic about investment opportunities in China’s upstream petroleum sector, mainly because of the technology needed to produce oil from the complicated geological blocks offered to them. The geology of China’s oil bearing basins is complicated and most big foreign oil companies are not interested in them.”
“It is impossible for foreign companies to aggressively invest in China’s upstream sector in the future. Some foreign companies have completely withdrawn from China’s onshore oil exploration and production sector, while a few are still looking for offshore opportunities, but without much hope,” added Liu, who was speaking at the China Oil & Gas Development Forum being held in Shanghai.
Liu cited the exampled of BP Plc and BHP Billiton pulling out of their Chinese investments after failing to find oil.
An unnamed executive with a foreign firm, who is attending the forum, agreed with Liu’s assessment but feels that the local firms have an agenda of their own. “Chinese companies don’t want foreign companies to explore and develop areas with easy geological structures,” said the anonymous executive.
“What China needs now is the technology, not the money, to explore and develop its ‘difficult blocks’. However, the sophisticated foreign technology isn’t readily accessible to Chinese companies these days because of the growing expense involved,” added the executive.
