IOCs Lose Interest in China (and Vice-Versa)

摘要

International oil companies (IOCs) were already rethinking their investments in China well before the recent slump in oil prices, but with Brent now below $50 per barrel and the country's oil product and natural gas markets oversupplied, the benefits of operating in the world's largest energy-consuming nation appear rather limited. Sentiment among IOCs in China is "close to rock bottom," Sanford Bernstein analyst Neil Beveridge wrote in a note last month. Beijing is working on new foreign investment laws, ostensibly aimed at making the process easier, but it is still unclear whether these will remove or create barriers in the energy sector. A call for more private capital in state-owned businesses, including in oil and gas, has created opportunities for independent Chinese firms, as the recent divestment of a stake in Sinopec's marketing business showed, but foreign companies have not been expressly invited to take part and are in any case unlikely to be interested, at least while oil prices remain weak (PIW Sep. 15' 14).