CNPC to open major oil, gas blocks to foreign investors

The China National Petroleum Corporation (CNPC), China's largest oil and gas producer, announced on Friday it will invite foreign companies to bid on exploration rights in nine designated blocks of land in China's Tarim Basin, a well-known oil and gas field.

The nine blocks cover an area of 110,000 square kilometers and the tender will require foreign firms to cooperate with Chinese counterparts, said sources with CNPC.

Under a production-sharing contract, foreign companies involved in resource exploration or production in China will pay the entire development cost in return for a significant share of future products.

The blocks are mainly distributed in the southwest, central and east part of the Tarim Basin, one of three basins in China boasting oil and gas reserves of over 10 billion tons.

This is the first time the blocks have been opened to foreign bidders.Several international oil companies have expressed interest, said CNPC.

The opening of the tender has not been determined, said Shen Zhong, an information officer with the CNPC.

According to the CNPC, the tender may be the largest foreign oil and gas cooperation project in China in 12 years.

Covering an area of 560,000 square kilometers, the Tarim Basin has an estimated recoverable petroleum reserve of 6 billion tons and a natural gas recoverable reserve of 8 trillion cubic meters.

The current annual oil and gas output is over 10 million tons of oil equivalent.

With an average of only one well per 1,000 square kilometers, the Tarim Basin is not being well exploited and there is great potential for further exploration, said the CNPC.

Source: Xinhua