State Council, PRC Exploitation of Onshore Oil Resources in Cooperation with Foreign Parties Regulations (Revised)

Promulgated: 23 September 2001
Effective: as of date of promulgation

Main contents: A major amendment to the Regulations include designation of China National Petroleum Corporation (CNPC, formed on the basis of the original CNPC in 1998) and China Petrochemical Corporation (SINOPEC, also formed on the basis of the original China Petrochemical Corporation in 1998), not just CNPC, as the Chinese parties in charge of and enjoying exclusive rights to all cooperative exploration, development, production and sale of onshore oil resources with foreign parties (Article 7). The revised Regulations also designate China United Coalbed Methane Corporation as the Chinese party having exclusive rights to exploit coalbed gas in cooperation with foreign parties (Article 30). Another major amendment is the removal of the requirements on foreign contractors to transfer technology to Chinese parties and to procure facilities, equipment, materials and services from Chinese suppliers on a preferential basis, as embodied in Articles 17 and 22 in the original version. The revised Regulations also permit foreign contractors to sell their oil, in China, to entities other than CNPC and SINOPEC (Article 15).