According to www.cs.com.cn, it is learnt from authoritative sources that thinkers have raised various ideas and proposal on the oil and gas reform, including the fundamental transformation of the oil and gas industry from the incomplete market-based industrial chains to market-based industrial chains.
Based on the report of Shanghai Securities News on Sept. 22, industry experts indicated that if the reform is deepened, various upstream and downstream sectors in the oil and gas industry, including the transfer of the mining right, the exploration and development, pipelined transportation, circulation, refining and other processes, will conduct marketization reform, which will achieve thorough changes.
The oil and gas system reform is a key reform task determined by the decision makers. Industry experts believe that the lagging marketization reform in the oil and gas industry as well as the low efficiency in oil and gas enterprises have affected the competitiveness of China’s economy. It is inevitable to conduct reform. It also explained why the oil and gas reform is the “pioneer” in the mixed ownership system reform.
It is learnt from authoritative sources that official thinkers have raised various ideas and proposal on the oil and gas reform. It focuses on the oil and gas industrial chain and conducts overall market-based reform in all key processes in the oil and gas industry, including the transfer of the mining right. Specifically, it will achieve the separation of administrative functions from enterprises, the separation of main and ancillary businesses and the separation of network and operation in enterprises. It will fully open accesses to the upstream, middle and downstream oil and gas market and streamline administration and delegate powers as well as strengthen regulation. At the same time, it will accelerate the progress of the abolishment, amendment and legislation of oil and gas regulations.
Based on current conditions, the oil and gas reform involves such interest bodies as the central and local governments, the three major oil and gas producers in China, namely PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH), China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH) and CNOOC Limited (00883.HK), employees of enterprises and local oil refining enterprises. The reform in the overall industry will increase the revenue of all interest bodies, which will provide bright future and impetus to the oil and gas reform.
Take the three major oil and gas producers as an example, with the separation of the main and ancillary businesses and the significant reduction in employees after the reform, their main businesses will be more competitive and their revenue will be better, which can improve the efficiency in capital operation. Their ancillary businesses will form new oilfield service markets and become more professional to reduce the operation costs of the main businesses of the three major oil and gas producers. Besides, the new enterprises from the stripped ancillary businesses can conduct shareholding reform and achieve listing to expand investment and operation scale.
For social capitals, the oil and gas reform will bring investment opportunities. After the market-based reform on the overall industrial chain, various investment entities are allowed to enter upstream industries to invest in traditional oil and gas and unconventional ones such as shale gas and coal seam gas, midstream industry to invest in circulation and transportation, and downstream industry to invest in oil refining industry.
Participants in the reform express that in spite of great difficulties on the whole, the reform can achieve all-win. On the one hand, it can strengthen China’s oil and gas resources guarantee capability, reducing use cost of oil and gas and creating more revenues for the country; on the other hand, it can speed up energy structure adjustment and replacement so as to improve the competitiveness of made-in-China products.
Analysts from Sinolink Securities Co., Ltd. (600109.SH) address that China will see the oil and gas reform this year and its overall plan is expected to be launched. On the whole, the core of the reform will focus on settling the relationship among markets, governments, enterprises and consumers and promoting the reform in four major fields. Some listed companies in the A-share market, such as Guanghui Energy Co., Ltd. (600256.SH), Hengyi Petrochemical Co., Ltd. (000703.SZ) and Geo-jade Petroleum Corporation (600759.SH), are specialized in businesses related to production and sale of oil and gas.
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