Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Real-Time Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
00135 KUNLUN ENERGY
RTNominal down5.640 -0.180 (-3.093%)
Research Report

10/01/2020 17:40

China opening up of oil and gas sector increases competition

[ET Net News Agency, 10 January 2020] China's opening up of oil and gas exploration and
production (E&P) will increase market participation and competition in the upstream
segment, according to S&P Global Ratings.
However, the credit rating agency sees limited impact of the new regulations on China
National Petroleum Corp. (A+/Stable/--), China Petrochemical Corp. (A+/Stable/A-1), and
China National Offshore Oil Corp. (A+/Stable/--) over the next two to three years.
That is given the dominant domestic market positions of these three big national oil
companies (NOCs), with most of the acreage being held by them.
S&P believes the opening up of the sector will increase the number of market
participants, in the long run, raising China's oil and gas production. The move is
consistent with the Chinese government's aim to raise domestic oil and gas production.
China currently imports 70% of the crude oil and 40% of the natural gas that it
consumes, posing an energy security risk. In 2018, the government had asked the three NOCs
to increase their domestic E&P activities to enhance national energy security.
The new regulation will also enhance the transfer of oil and gas acreage among E&P
companies, improving resource allocation efficiency. Currently, the NOCs hold most of the
acreage, and they may not invest in exploring all of it.
The new regulation stipulates that exploration rights will last for five years. These
rights can be renewed four times for five years each, but the acreage will be reduced by
25% upon each renewal based on the first exploration rights. S&P believes this will boost
E&P companies' exploration efforts and speed up asset turnaround.
The agency expects the NOCs to still hold most of the exploration acreage in an expanded
and more competitive market. Moreover, if they have to relinquish the acreage, they will
most likely hand over those areas with less promising prospects. As such, that acreage may
not be attractive enough for new entrants.
Today the Ministry of Natural Resources announced that companies registered in China
with a net asset value of more than Chinese renminbi 300 million are eligible to obtain
oil and gas mining rights. Companies engaging in E&P activities should comply with
regulations, including safety and environmental protection, and have the relevant
technical capability. (KL)

Remark: Real time quote last updated: 28/02/2020 09:51
  Real-time basic market prices of Hong Kong securities are provided by HKEx; a Designated Website authorized by the HKEx Group to provide the Service
A Member of HKET Holdings
Customer Service Hotline:(852) 2880 7004     Customer Service Email:cs@etnet.com.hk
Copyright 2020 ET Net Limited. http://www.etnet.com.hk ET Net Limited, HKEx Information Services Limited, its Holding Companies and/or any Subsidiaries of such holding companies, and Third Party Information Providers endeavour to ensure the availability, completeness, timeliness, accuracy and reliability of the information provided but do not guarantee its availability, completeness, timeliness, accuracy or reliability and accept no liability (whether in tort or contract or otherwise) any loss or damage arising directly or indirectly from any inaccuracies, interruption, incompleteness, delay, omissions, or any decision made or action taken by you or any third party in reliance upon the information provided. The quotes, charts, commentaries and buy/sell ratings on this website should be used as references only with your own discretion. ET Net Limited is not soliciting any subscriber or site visitor to execute any trade. Any trades executed following the commentaries and buy/sell ratings on this website are taken at your own risk for your own account.