China urged to open up oil market (Xinhua) Updated: 2006-06-14 09:33
The Chinese oil market should be opened to foreign companies to give China
better access to international supplies and improve the operations of Chinese
firms, according to a new report.
The time has come for the government
to clarify the roles it expects private and state-owned foreign oil firms to
play in the Chinese market, says the report by the Development Research Center
(DRC) of the State Council.
In particular, the conditions for market
entry and exit and for partnership with Chinese national oil companies and other
local operators need to be clearly defined, says the report.
All policy
and regulatory conditions should be transparent and applied without
discrimination, stresses the report, which was presented to a seminar with the
theme "An Energy-Saving Society" held by the DRC.
An open market enabling
foreign companies and investors to play a greater role in oil supply and
domestic resource development could be a positive signal to the international
community, making it easier for Chinese oil companies to engage in similar
activities abroad.
Meanwhile, Chinese firms should plan to interact
profitably with and learn from foreign companies for better integration in
global and regional oil markets, the report continues.
All major players
seem to welcome China's growing role in world oil and, to a lesser extent, gas
markets. The investment of Chinese companies in the development and marketing of
new reserves are perceived as a stabilizing factor in future markets.
However, more transparency would improve the business orientation of
Chinese national oil companies and ease their entry in the global market where
they could be world class players, says the report.
Energy is the
world's biggest business dominated by its largest corporations.
Exxon-Mobil is the world's largest private oil corporation while Saudi Aramco is
the world's largest state-owned oil company with reserves 20 times greater than
Exxon, the report observes.
Close relations with such companies can
improve an importing country's access to international oil supplies, and many
industrialized countries have relied successfully on the international oil
companies to secure their import needs.
The report offers no
recommendation on whether the Chinese government should emulate this strategy,
but it points out that international companies have a useful importing role,
which they could play along with Chinese national oil companies.
The
international oil companies could also provide access to state of the art
technology and management practices across the whole range of oil and gas
industry activities, the report stresses. (For more biz stories, please visit Industry Updates)
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