The Role of the National Oil Companies in China's International EnergyPolicy
On May 26, 2005, the China Environment Forum and STAGE co-sponsored a seminar on China's national oil companies and energy cooperation in Northeast Asia that featured two researchers from the Centre for Energy, Petroleum, and Mineral Law and Policy at the University of Dundee, Scotland.
China's rapidly rising requirements for imported energy have led the government and state energy companies to develop a number of strategies to enhance the country's security of energy supply. Prominent among these has been the extensive overseas search for exploration and development opportunities by China's state petroleum companies. They are now active or seeking opportunities in about 50 countries. The scale, extensive geographic scope, and context of these projects have potential implications for global oil markets, for other petroleum companies, and for host governments. Though China's national oil companies (NOCs) are, to some extent, behaving like other NOCs before them, a number of features of China's engagement with the world suggest that their impact is likely to be greater—-particularly due to the willingness of Chinese NOCs to invest in highly risky areas (e.g., Sudan) or overbidding to secure highly profitable markets (e.g., Venezuela)
While expending considerable effort on this internationalization of the NOCs, the Chinese government has made little progress in developing regional energy cooperation in Northeast Asia. The geographic juxtaposition of three major energy importing nations (China, Japan, and Korea) and a major energy exporting nation (Russia) provides the opportunity for cooperation in a number of fields that should yield long-term benefits to all players. Progress has been constrained by the nature of their respective national energy policies, by mutual distrust, and by the lack suitable regional institutions. However, the speakers noted that some existing regional institutions (e.g., the Trilateral Ministerial Meetings between Japan, China, and South Korea; Tumen River Project; Korean Economic Development Organization) could provide forums for such energy dialogues.