The State Council recently endorsed the guidance on key works on deepening the economic system reform in 2017 formulated by the National Development and Reform Commission (NDRC). The guidance proposed to step up efforts in the reform of the electricity, oil and gas and other key industries. It also proposed to introduce plans on the oil and gas system reform and accelerate the formulation of supporting policies and special plans.
The Citigroup said in a recent report that China is expected to announce documents on the reform of the natural gas industry within a month, allowing downstream gas distributors to have a more economical supply of natural gas and boost their sales growth.
In addition, according to an exclusive coverage on www.sinoergy.com, an NDRC insider involved in the preparation of the plan said that the approval process for the oil and gas system reform plan has completed. Both the Central Leading Group for Comprehensively Deepening Reforms and the State Council have reviewed and approved the reform plan in principle. The insider said that the plan will be given out by to the NDRC to other relevant authorities and will present itself to the outside soon.
The NDRC insider said that the NDRC has organized its functional departments to draft supporting documents for the implementation of the plan. It will introduce various supporting documents following the release of the overall plan.
据之前经济参考报消息，国家发改委和国家能源局将研究制定勘探开采、管网运营等方面配套文件，以及综合改革试点方案和专项改革实施方案，积极稳妥开展试点工作。
According to a previous report from the Economic Information Daily, the NDRC and the National Energy Administration (NEA) will study and formulate supporting documents on the exploration and production of oil and gas and the operation of pipe network as well as the implementation plan on the comprehensive pilot reform program and special reforms to actively and steadily carry out the pilot reform.
One of the highlights in the oil and gas reform is that competitive businesses, such as exploration and mining, will open up at a faster pace. It is learnt that in after the oil and gas upstream first called for bids for the exploration and mining rights in October 2015, the second batch of tendering works in 29 links are getting closer. But it can be ignored that the reform is still faced with lots of issues, including complex conditions in links, lack of experience, talents and technology in bid winners and low oil prices. Relevant authorities and pilot provinces are brewing detailed rules to support the reform.
In accordance with China’s overall deployment in the energy reform, China has considered the oil and gas system reform since 2014 and finally made a plan at the end of 2015 which were revised several times afterwards. This year's government work report made it clear that China should devote to the oil and gas system reform and open competitive business in this field.
Another highlight is the pipe network reform. Based on the government’s thoughts for the oil and gas reform and the draft soliciting for public opinions, the reform on pipe network will advance step by step: firstly determining the price of pipe transmission, gradually achieving financial independence and opening the pipe network to third parties. Subsequently, it will achieve legal independence when time is proper, carry out unified scheduling and other follow-up steps and establish independent pipe network companies.
A researcher from Shenwan Hongyuan Securities said that this series of reforms will bring investment opportunities in asset integration and private enterprises. Wang Yusuo, member of the CPPCC National Committee and chairman of the board of ENN Energy Holdings Limited, said in an interview that the company has participated in the mixed ownership reform of Sinopec Sales Company since 2014, and will continue to pay attention to opportunities in this field. Wang expressed interest in opportunities that are related to ENN. The reform of the oil and gas upstream needs rich technological accumulation and excellent team preparation, last year ENN acquired foreign overseas oil and gas assets to make preparations to enter the upstream. When polices are mature in the future, the company will likely to pay attention to the oil and gas exploration and development at home.
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