If we expect to meet domestic energy needs by “going global,” , We must respond to the situation. , Change the method. , Multiple fronts advancing simultaneously , Encourage, organize, and assist private capital in going global. , This article analyzes how to open up an additional channel for China’s capital outflows and for ensuring China’s oil security. It provides valuable insights for Chinese private enterprises.

　　 From an operational perspective , The best entry point for private capital in the overseas oil industry is small-scale blocks. Before investing in small blocks , Private capital can address its talent shortage by hiring retired professionals from the three major state-owned oil companies. , Then, following international practice, we’ll use intermediaries to find a suitable block. After securing the small-block project, , Block development can be completed through forms such as consortium investment and outsourcing of business. , You can also achieve great results with small efforts—“reverse the blocks.”

　　 Investing in oil is similar to... IT Venture capital , High returns come with high risks. Therefore, private capital entering the international market for the first time should keep a low profile as much as possible. , Adopt a joint venture rather than a wholly-owned subsidiary. , It’s best to have a Western partner. , And as much as possible, attract state-owned capital from the host country of the project. , Sometimes, even if it means sacrificing some interests. , Such as granting non-cash equity stakes, etc.

　　 The state-owned nature of China’s three major oil companies is becoming one of their weak points in overseas investment and operations. CNOOC's bid to acquire U.S. Unocal Corporation Faces Obstacles. , and 2002 At the end of the year, CNPC’s bid to acquire Russia’s Slavneft came to nothing—entirely due to the word “state-owned.”

　　State-owned enterprise , Especially superstate-owned enterprises like China's Big Three oil companies. , No matter where it is listed. , As long as state-owned shares hold the majority. ( This ratio is, respectively, for PetroChina and Sinopec: 90% and 67.92%), They would be perceived as being under government control. , Many normal commercial activities are labeled as being carried out in accordance with the government’s intentions. It can be confidently asserted. , As China's national strength continues to grow, , The demand for oil and other forms of energy continues to rise. , China’s acquisitions of overseas energy resources will also increase accordingly. , The controversies and resistance surrounding acquisition cases such as those involving Unocal and Slav Petroleum will only grow stronger.

　　 In today’s world, where marketization and privatization are rampant, , Western countries find it difficult to reject the market behaviors of ordinary enterprises. Therefore , If China expects to meet its domestic energy needs by “going global,” , We must respond to the situation. , Take a different approach , Encourage, organize, and assist private capital in going global. , To open up another channel for China’s capital outflows and for ensuring China’s oil security. We believe... , China’s requirements for ensuring oil security are comprehensive and all-encompassing. , Just like national maritime security. , Neither strategic nuclear submarines nor anti-smuggling speedboats can be missing—large state-owned oil enterprises and private oil enterprises should complement each other. , Joint development.

　　 Private capital struggles to extract oil domestically.

　　2005 Year 2 Moon , The State Council has issued the "Several Opinions on Encouraging, Supporting, and Guiding the Development of the Non-Public Sector, Including Individual and Private Enterprises." ( Also known as the “non-public sector economy” 36 "item" ), This has opened the door for private capital to enter the oil industry. Meanwhile, the newly established State Council Energy Administration has also made industrial reform one of its key tasks. , We believe that introducing oil enterprises with diverse ownership structures will be the main focus.

　　In fact, private capital had already quietly entered China’s petroleum industry, which had previously been dominated by the three major state-owned oil companies. , Well drilling for oil production—in regions such as Xinjiang, Heilongjiang, Shandong, and Shaanxi. , Almost anywhere there are state-owned oil companies, , There are shadows of private enterprises.

　　As early as 1994 Year 4 Moon 13 day , CNPC and the Shaanxi Provincial Government signed the “Agreement on the Development of Petroleum Resources in Northern Shaanxi.” The background behind the issuance of this agreement is... , Due to the imprecise boundaries of the registered area. , The demarcation of spheres of influence among various factions in the Northern Shaanxi region is inaccurate. , “Central Army” ( Changqing Petroleum, Sinopec ) and “local forces” ( Changyuan Petroleum ) Conflicts and disputes often arise over issues of crossing boundaries. The core content of the agreement involves delineating approximately [amount] from within the registered area of the Changqing Oilfield. 500 Square kilometer , By An Sai and others 6 Developed by the county organization. At the same time, an agreement was reached. , Delineated from the Changqing Oilfield and the Yanchang Oil Mine. 1080 Square kilometer , By means of entrustment, joint ventures, and other methods , Developed by relevant counties and districts in Yan'an and Yulin. , South of Jingbian 3500 The square kilometers are jointly developed by the Changqing Oilfield and local authorities. Due to a lack of funding and technology, individual counties... , Investment attraction and the transfer of well locations can be adopted. , Introduce joint venture partners to participate in oil development. , This includes individually-owned private enterprises.

　　Based on the “agreement” , County governments have begun to launch large-scale efforts to attract foreign investment. , Private investors are flocking to oil exploration. , Among them are quite a few private capital from Wenzhou. To... 1998 At the end of the year , The total investment in oil development across all counties in the Yan'an and Yulin regions has reached... 50.5 100 million yuan , Among them, the associated enterprise 32.9 100 million yuan , Joint drilling 5561 mouth , Annual oil production reaches 168 Ten thousand tons. Oil development revenue accounts for a portion of local government finances. 80%, 6 Year after year 50 Twice. To 2000 At the end of the year , The two cities of Yan'an and Yulin alone have attracted private oil investors. 1039 Home , Drilling a well 4473 mouth , Establish crude oil production capacity 100 Ten thousand tons.

　　 Chen Huanying, head of the preparatory group of the Petroleum Industry Chamber of Commerce under the Xinjiang Federation of Industry and Commerce, conducted inspections at oilfields including Tarim and Karamay. , It was also found in some oilfields and marginal areas. , Many individual operators are extracting oil from decommissioned oil wells. , However, the extracted oil must be sold to the lessee as required. , Moreover, oil extraction is carried out quietly.

　　The non-public economy 36 Before the “条” was issued , Due to regulatory restrictions , These private capital investments are essentially either in the form of production contracts or nominally owned by local governments. , Some small-scale oil and gas fields are actually exploited in forms controlled by private entities. , Moreover, they often take over oil and gas wells that have been abandoned by companies such as CNPC and Sinopec to resume production. , The oil and gas produced , Not included in official statistics. , The exact number remains a mystery for now.

　　But the “Shaanbei Oil Incident” that has occurred since last year. , A reminder for private capital eager to invest in the oil industry: Whether it comes to capital, technology, or experience, private capital is far behind state-owned oil companies. , In a short period of time, we need to promote the “non-public economy.” 36 The opportunities brought by the “条” will undoubtedly still face various challenges before they can truly become a reality and lead to substantial breakthroughs in China’s petroleum industry.

　　At a time when private capital entering the oil industry is facing investment bottlenecks, , The approach taken by Changlian Petroleum Holdings Co., Ltd. is quite insightful.

　　Despite the uproar surrounding CNOOC’s bid to acquire Unocal, , Changlian Petroleum 6 Moon 29 Its birth in Beijing seemed much more unremarkable, but Gong Jialong, Chairman of the Board of Changlian Petroleum, has ambitious aspirations. , Big talk. : Changlian Petroleum aims to become a large-scale multinational oil group company integrating exploration and production, refining and chemical processing, storage and logistics, wholesale and retail sales, and import and export. , Covering the entire oil industry chain. In the early stages of establishment , “Changlian Petroleum” will focus on oil exploration overseas. , We hope to collaborate with large state-owned enterprises as well as multinational oil groups. , Meet China’s growing oil demand. ( Appendix 1) 。

　　In the petroleum industry , Chang Lian Petroleum is not the first private-capital enterprise. , Moreover, this grand blueprint—“large and comprehensive”—may encounter many difficulties in actual implementation. , But from its inception, it has been focused on “going global.” , For China's petroleum industry, , This could represent a historic breakthrough.

　　In fact , The visionary has already taken the first step. 2001 Year , Wanxiang Group, under Lu Guanqiu, has acquired a company in Texas, USA. 6 the mining rights for a block. As of 2004 Year , Wanxiang Group has invested in 1000 Ten thousand US dollars , Drilled in Texas 100 Oil well , The annual rate of return has consistently remained at 50-60% Left and right. The updated case is... ,2005 Year 6 Moon 17 day , The [event] held in Harbin City, Heilongjiang Province 16 At the economic and trade fair , A private enterprise in Heilongjiang—the Heilongjiang Longdu Petroleum Sales Company—claims to have signed an agreement with Russia’s Oil Capital Petroleum Company, with a total investment of... 10 A letter of intent worth hundreds of millions of RMB , A refinery is planned to be built at the Tyumen oilfield in Russia. , in the processed finished oil 1/3 That is 200 Ten thousand tons sold to China.

So, what are the prospects for private capital entering the international arena?

　 　He abandons me, and I’ll take my chances in the small block.

　　Limited by factors such as experience and capital. , The best breakthrough point for private enterprises in the overseas oil industry should be small-scale blocks that have been overlooked by international oil giants. ( Also known in the industry as marginal oilfields. ,marginal fields) Development.

　　In the global oil industry , Even the overseas operations of China's three major oil companies—Sinopec, CNPC, and CNOOC—are still dwarfed by those of global industry giants. , The share is also very small. ( Table 1), This also reflects, from one perspective, the gap in strength between the two. Meanwhile, the comparison of power between domestic private capital and international oil giants is... , It's no different from a small sampan versus a giant ship. , Differ by several orders of magnitude.

　　So then , In the global oil industry, dominated by international oil giants, , How can domestic private capital get a piece of the pie? ? We believe that private capital going abroad should focus its attention on the exploration and development of small- to medium-sized blocks.

　　In the field of oil resource extraction , Under the spotlight, the most eye-catching are large- or extra-large oil and gas field projects. , Its exploration, development, and production investments easily run into billions or even tens of billions of dollars. Yet beyond these large-scale projects, there are numerous smaller ones often referred to as “small blocks.” , Especially the blocks in the exploration phase. , Based on geological prospects and the financial needs of the local government. , Sometimes, just a few million dollars can secure partial or even full ownership of a block.

　　Moreover, large international oil companies often tend to overlook “small blocks.”

　　First, because large companies have high fixed costs. , The scale of the economy has also grown accordingly. Because projects, regardless of size, , Some steps are the same. , such as the assessment, implementation, and management phases , Also, in areas such as administration, human resources, and finance... , The work content for both large and small projects is basically the same. , Therefore, the allocation of human resources is similar as well. In large companies... , Generally due to many programs. , It also involves a large number of personnel. , Moreover, its average labor cost is high. , This also results in relatively high fixed costs.

　　Second is , Generally, the market capitalization of large-scale oil companies exceeds 10 billion US dollars. , China National Petroleum Corporation exceeds 100 billion yuan. , Exxon is in 4 Around 100 billion yuan. For listed companies, , The stock price is the most concentrated reflection of success or failure. , What investors care about is how much reserve increase they can get for what cost. One... 5 The discovery of reserves amounting to tens of millions of barrels could make a fortune for individuals or small companies. , But compared to the tens or even hundreds of billions of barrels of reserves held by large corporations, , The incremental increase is negligible. Meanwhile... , Many of the challenges faced in the exploration, development, and production of small oil fields are the same as those encountered in large oilfields. , Such as safety and environmental protection, etc. Due to their relatively small scale, , Even if the small block ultimately succeeds, , It can't even stir a ripple in the market. , It’s a thankless task for big companies.

　　Therefore, small-scale projects will become a highly significant opportunity for private capital in China. According to relevant statistical data, , Domestic private capital is fully capable of mobilizing the financial resources needed to develop small-scale residential communities. According to statistics from the All-China Federation of Industry and Commerce, China... , As of 2003 At the end of the year , The number of privately-owned enterprises registered in China has reached 300.52 Ten thousand households , Registered capital 35305 100 million RMB ; Individual business households reach 2353.19 Ten thousand households , Registered capital 4186.99 hundred million yuan. Moreover, it is currently increasing at an average rate of per day. 1500 Multiple private enterprises , The registered capital increases daily. 30 It is experiencing rapid development at a pace of hundreds of millions of yuan. From the enterprise perspective... , China currently 90% The enterprise is a small- and medium-sized enterprise. , And most small and medium-sized enterprises are privately owned. China. GDP of the 55.6% , the newly added industrial output value of 74.7% , social sales of 58.9% , tax-related 46.2% and the total export value 62.3% All of them are created by small and medium-sized enterprises. And moreover, , In recent years, the investment capacity of private capital has also significantly improved. Statistical data show that... ,2004 Fixed-asset investment by private enterprises for the year was 5817.9 100 million yuan ,2005 The first quarter of the year is 1114.4 100 million yuan.

　 　In the international oil industry , Small blocks generally include the following four types:

　　 (1) Insufficient data; the existing geological data are very rudimentary. , The reserve outlook is very uncertain. Block owner ( Sometimes it's the government. ) For different considerations , For example, the hope of using foreign capital and technology to explore and confirm reserves. , Or it may be put up for transfer to address fiscal issues. Due to insufficient data, however, ... , These types of block geological risks are relatively high. , It can truly be called an adventure. But it also has great potential for value appreciation. , After taking over, we’ll invest in some exploration work. ( Such as seismic exploration ), Perhaps there’s no need to wait until reserves are confirmed. , As long as the data show a promising outlook, , You can then proceed with further financing or cashing out. 2001 The Indian government had previously organized a round of bidding. , We hope to leverage the capabilities of foreign companies to conduct further exploration of our country’s original block resources. , At that time, most of the overseas bidders were small companies.

　　 (2) The scale is insufficient; sufficient exploration work on the block has already confirmed the presence of oil and gas reservoirs. , But the reserves are relatively too small. , Not yet developed due to failure to reach economic scale. There are block-like structures of this kind all over the world. For example, the United Kingdom has them. 250 The oil and gas discovery has not been developed due to its small scale. CNPC already has a discovery in Niger, Africa. , But precisely because of its small size, it remains undeveloped to this day.

　　 (3) Oil fields after production: Currently, there are many oil fields around the world that were once exploited but have now been abandoned. The decision to abandon it in the past was made based on the technological conditions at the time. , It is highly likely that new harvesting technologies could bring these oilfields back into production. Nigeria has previously offered such blocks to Chinese investors. In the United States... , There are many old oil wells that can be developed a second or even a third time. , Sometimes, you can try it out for as little as a few hundred thousand dollars.

　　 (4) Refunded block Internationally , The initial agreement between general investors and the government will stipulate: , After the completion of different stages of exploration , Block rights holders must return a certain proportion of the blocks to the government. , The latter will reissue these returned blocks to other companies. You can imagine... , These types of blocks are often located in peripheral regions. , Moreover, the areas are scattered. This could also present an opportunity for small companies.

　　It is worth noting that , The so-called economic scale of an oilfield is a flexible target. , Affected by many factors , For example, technological advancements can lead to lower extraction costs or higher recovery rates. , The recovery rate has been, for a rather long period in the past, 30% Upgrade to 40%, The industry expects it to take about ten years. 50% All of this could transform previously non-economic reserve sizes into economically viable ones. Of course, the long-term trend in oil prices has the greatest impact on determining economic scale. , Because this serves as a crucial basis for the company’s investment decisions. Major global business institutions and oil organizations have already revised their long-term oil price forecasts from those made two or three years ago. 25-30 The U.S. dollar rises to 40 U.S. dollar , Undoubtedly , This will make many previously non-economic discoveries economically viable. There are also numerous examples internationally of small blocks growing into larger ones. Hunter Oil. (Hunt Oil) The founder, Harodson Lafayette Hunter [Haroldson Lafayette Hunt (1889-1974)], It is with 3 Millions of dollars to acquire the reserves. 60 Billion-barrel block , Suddenly becoming a world-class billionaire.

　　 How to find the right block ?

　　Hire a consulting firm or intermediary , Assist public relations in securing the block. , It is a standard practice in overseas project implementation.

　　Usually , As soon as news spreads that an investor intends to invest in the upstream block, , All sorts of people—intermediaries or brokers—will automatically come knocking at your door. This is especially true for Chinese investors. , It’s well known that China lacks oil. , Moreover, sellers always assume that Chinese buyers sometimes tend to overpay a bit.

　　These flood of project proposals , The vast majority are useless. , Sometimes, business opportunities simply don't exist at all. The block might have them, though. , But the holders have no interest in putting them up for sale. The “resellers” are playing “karate with empty hands.” : They first make up stories to find a buyer. , Let's go back to talking about motivating the holders. ( Seller )。

　　But with the help of professionals’ extensive experience, , It can filter out some invalid items. The first-level effective filter requires sellers—whether intermediaries or the owners themselves—to provide more geological data. , But not merely the geographical location of the block. , They are also required to provide proof of ownership. Many “resellers” will hesitate at this point. , Because geological data are generally valuable. , And it’s confidential. , Unless he can actually lock in the seller or pay for the data himself. , Otherwise, it can't be produced.

　　Next , Private capitalists need to rely on intermediary forces—overseas. , Intermediary institutions—such as investment banks, law firms, and valuation firms—that possess project information may play the role of intermediary or consultant. , But even more numerous are well-informed, globally connected individuals—many of whom operate under the guise of offshore companies. One such figure is Calouste Gulbenkian, an Armenian. (Calouste Gulbenkian) He can be considered the founding master of this trade.

　　On the eve of World War I , When today’s Iraq was still part of the Ottoman Empire’s territory. , Gubenko, firmly convinced that the Tigris River held oil reserves, founded the Turkish Petroleum Company. (Turkish Petroleum Company) At that time, the equity distribution of Turkish Petroleum Company was held by British Petroleum. (BP)45% Shell 25% Deutsche Bank 25% Gu Benke'an 5%, To hold full oil rights in Iraq. Thus, Gubenko won “ 5% Sir (Mr. 5%) This famous laurel crown ( After World War I , The defeated Germany 25% The rights were transferred to the French. , Gubenke'an still maintains its 5% of the shares ) From that time on , Transaction commissions for intermediaries in the industry are often based on 5% As a benchmark, Gubenkang henceforth became the figure most admired and envied by generations of oil intermediaries.

　　In fact, even in so-called transparent Western countries like the UK and the US... , Even having a meal with someone who holds “decision-making power” requires paying for it and arranging it through an intermediary. , Moreover, oil is always intertwined with interests beyond the economy. , There’s no other force to settle it. , It's very difficult to succeed relying solely on commercial reasons.

　　During CNOOC's bid to acquire Unocal, , CNOOC has engaged the U.S.-based public policy firm and the UK-based Brunswick Group. , Launch a lobbying campaign to quickly allay the concerns of some U.S. opponents. According to U.S. media reports. , In addition to both being internationally renowned public relations firms, these two companies... , There’s another common point. , Namely, the expert who is best at handling and defusing negative public opinion. President of Gongce Company and a renowned U.S. public relations specialist. Mark Palmer, Served as spokesperson for Enron at the height of public hostility following Enron’s bankruptcy. , Helped Enron successfully navigate the challenging bankruptcy process. Its vice president. Mark McKinnon Was the incumbent President Bush. 2004 Public relations director during the year's re-election campaign , He was a key strategist behind President Bush’s successful re-election. ; Meanwhile, the Brunswick Group also served as public relations consultants following the bankruptcies of Enron and Tyco International.

　　After obtaining relatively accurate data, , The assessment procedure can now be initiated. The purpose of the preliminary technical assessment is to make a rough judgment on the geological prospects of the project. However, even if the prospects look promising... , There is often still a long way to go before proven reserves are fully identified. , Many more exploration efforts are needed.

　　To conduct a thorough project evaluation , Within the core investment team , Geologists and geophysicists must be present. , They can make a preliminary assessment of the original technical documentation for the block. In the international oil market... , The blocks available for sale all have technical documentation to varying degrees. , Including seismic exploration data , and the assessment report formed on this basis. Except for the transferor, , The sources of technical data may also include the government of the host country, other companies that have previously conducted exploration in the block or adjacent blocks, and certain valuation firms. , They are generally available in London, Houston, Calgary, and Singapore. Usually, all you need to do is pay. , You can obtain this data.

　　The next step is the economic and technical assessment. , At this point, a finance professional with experience in overseas project operations would be very helpful. To clarify the situation under different reserve levels, , What is the total cost—from exploration and development to production and the transportation of oil and gas out of the field? , At a certain oil price level , Where is the break-even point?

　　If the preliminary economic and technical assessment is feasible. , Due diligence can then be initiated by signing a framework agreement or a memorandum of understanding. Generally, , At this point, the rights transferor needs to provide more technical data or operational information. ( If the project is already underway. ), Investors need to allocate more manpower for assessments. Another key component of due diligence is legal matters. , The questions to be answered include whether the transferred rights are clearly defined, the joint operating agreement of the investment consortium, the form and content of contracts with the government, and the legal and regulatory environment of the host country, among others.

　　Southeast Asia can be seen as a key region for Chinese mainland private enterprises seeking to enter the international oil industry (see figure). 1 ). First, the project has abundant resources. , Moreover, this region is a gathering place for overseas Chinese. , Among them are no shortage of prominent figures from the local economic and business circles. , It has already established a significant impact across all aspects of society. , They can provide oil and gas resource projects to mainland private enterprises through different roles. Secondly, , Southeast Asian countries such as Indonesia, Thailand, and the Philippines generally enjoy good relations with China. , It provides a certain degree of protection against geopolitical risks related to oil. Third. , Financing is relatively easy. , Hong Kong and Singapore, both among Asia’s most dynamic and internationally integrated financial markets, are located in this region—especially Singapore. , It is located at the midpoint along the route of Middle Eastern crude oil passing through the Strait of Malacca into East Asia. , Leveraging this geographical advantage , Singapore has developed a series of industries centered around the petroleum sector. , Such as ports, terminals, shipping, shipbuilding, petrochemicals, and even fuel futures. , It is also the listing and trading venue for many small oil companies in the region. Pearl Oil It’s a small oil company listed in Singapore.

　　Capital active in the Hong Kong and Singapore markets has a deeper understanding and awareness of oil and gas projects in the region. , High risk tolerance , This will facilitate future project launches or financing through other channels.

　　In addition , Southeast Asia is close to China's mainland market. , Meanwhile, the mainland market is the primary export destination for its oil and gas resources. Chinese capital investment not only brings financial resources... , More market-oriented , Lay the foundation for future further financing. , It should be well-received.

　　Complete block development through consortium investment and outsourcing of business operations.