JVs to pay for oil exploitation
Author:Network sources Source:Network sources Date:2012-04-12
A new regulation requiring Chinese-foreign oil joint ventures to pay an additional exploitation fee may facilitate offshore cooperation in China, even though it will involve a slight rise in costs, an oil analyst told the Global Times Wednesday.

"The payment requirement will help offshore foreign cooperation, particularly in the South China Sea, where there are many projects but also sovereign disputes," said Cheng Ruifeng, an analyst at oil and gas information service firm Shanghai Toprise Information & Technology Co.

"If a foreign company wants to get oil and gas resources from Chinese territory, then it needs to pay," Cheng said, noting that the fee could offer additional clarification for deals in disputed areas.

The purpose of cooperation between Chinese and foreign firms in the oil sector is for domestic firms to gain access to foreign technologies for extracting oil in challenging offshore areas, Cheng said, an area in which China lags behind.

The Ministry of Land and Resources published a statement on its website Tuesday, announcing that Chinese-foreign joint ventures exploiting oil resources in China, both onshore and offshore, would be required to pay mineral resource compensation fees, backdated to March 31.

Companies that fail to comply with the regulation will be punished or denied approval to continue operating, according to the statement.

The fee will be calculated by using a formula that was announced in a regulation on mineral resource compensation fees in 1994, according to the statement.

The ministry was not immediately available for comment.

The 1994 regulation did not mention specifically whether joint ventures needed to pay such a fee, so they have never paid it, China Business News reported Wednesday, citing L¨¹ Bin, an analyst at commodity information provider sci99.com.

"After the new announcement, exploitation costs for joint venture projects will marginally increase, and based on the types of the mineral resources, the compensation fees will range between 0.5 and 4 percent of the sales revenues," L¨¹ said.

China National Offshore Oil Corp (CNOOC) has the most offshore projects available for foreign cooperation.

In 2011 alone, the company offered 19 blocks for cooperative exploitation, covering an area of 52,006 square kilometers, the newspaper reported.

The fee will have "a negligible impact" on CNOOC's overall operation, Chen Bi, vice president of CNOOC Ltd, a subsidiary of CNOOC, told the newspaper.

The company Wednesday announced a production-sharing deal with Italian oil and gas company Eni SpA to exploit the deepwater Block 30/27, a block in the South China Sea that it first offered last year. The companies have already cooperated in blocks 16/08, 16/19 and 28/20 in the same area.

Shares in CNOOC closed down HK$0.32 at HK$15.28 Wednesday in Hong Kong.



Talented person employment | P
hemmer mill
免责声明:文章、图片来源于网络,若有侵权,请联系本网工作人员删除。本文仅代表作者本人观点,与本网无关。 文章内容仅供参考,不构成投资建议。请读者仅作参考,并请自行承担全部责任。