China extends Xinjiang oil block bids to non-state companies

AIBING GUO

BEIJING (Bloomberg) -- China is offering six oil and gas blocks in the resource-rich province of Xinjiang to non-state companies, extending the bids beyond state-owned explorers.

Qualified private companies, registered in China and majority-controlled by a Chinese citizen, can bid for a three-year exploration tenure, the Ministry of Land and Resources said in a statement Tuesday. The bidders should have net assets of more than 1 billion yuan ($161 million) to qualify for the tender.

China is spurring competition in oil and gas exploration, which has long been dominated by state-owned companies, such as China National Petroleum Corp. and China Petrochemical Corp. Opening up the upstream business will bring more capital to the sector and accelerate exploration, said Lin Boqiang, director at the Energy Economics Research Center at Xiamen University.

“It opens up Xinjiang’s rich resources and injects some urgency into Chinese oil companies’ exploration efforts,” he said. “Similar steps can be quickly applied to other regions if the offering attracts enough interest.”

The ministry will give detailed information about the blocks to interested bidders from July 20 to July 22 in Beijing, according to the statement. The bidding deadline is Oct. 20.