BEIJING, July 31 (Xinhua) -- As a vital step in easing market access for foreign investors, China has announced opening up the upstream exploration of its oil and natural gas resources by scrapping joint-venture restrictions.
Taking effect on July 30, the move aims to attract overseas participation in the field and advance the country's ongoing reform on energy systems.
Spurred by the growth in energy consumption, China has become the world's largest importer of crude oil and natural gas, with its dependency on foreign crude oil and natural gas hitting 69.8 percent and 45.3 percent respectively in 2018, according to the China National Petroleum Corporation.
In contrast, the country's crude oil output had slipped for three consecutive years by the end of last year.
Commenting on the situation, Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University, said the measure to facilitate overseas investment in exploration will inject impetus into China's oil and gas production.
"China boasts advantages in technologies of exploring conventional oil and natural gas but lags behind some foreign counterparts in unconventional exploration," Lin said. "It is, therefore, necessary to promote international cooperation in the unconventional sphere."
The measure is highly praised by leading overseas energy companies who expect wider market access and more opportunities in China.
Yang Xiaoping, president of British Petroleum (BP) (China), said the decision will boost the Chinese energy market, create a business environment with more fairness and openness and further accelerate the technological upgrading of the country's oil and natural gas exploration.
"Lifting market restrictions for the natural gas exploration will facilitate the use of clean energy in China, speeding up the country's transformation into a low-carbon development model," Yang added.
Describing the opening-up move as "inspiring," Zhang Xinsheng, executive chairman of Shell Companies in China, said the energy and petrochemical giant will enjoy more business opportunities and have more investment options in related industries with broadened market access.
Zhang added that Shell values the cooperative relationship with its Chinese partners and will continue to bring its cutting-edge technologies and professional capabilities to China.
Despite the pressure from the inflow of foreign players, Chinese energy companies are competitive enough and the two sides' high complementarity in technologies leads to cooperation, Lin said.
The opening-up of exploration is a crucial part of the revised negative lists for foreign investment market access, which allows foreign investors to run majority-share-controlling or wholly-owned businesses in more sectors.
Thanks to its continued efforts to open up wider, China attracted a record high foreign direct investment (FDI) of 138.3 billion U.S. dollars last year, bucking a global trend of FDI slide. In the first five months of this year, the country saw an FDI inflow of 54.6 billion dollars, up 3.7 percent year on year.