Beijing is planning to open up its oil and gas production industry to private investment, according to state news agency Xinhua, eyeing the addition of between five and eight "megafields" to its oil pool over the next four years.
These fields together hold around 733 million barrels of crude oil. Another 5-10 gas deposits to be brought online in the period would add reserves of at least 100 billion cubic meters to the hydrocarbon pool.
China is the world's top importer of crude oil - and the second-largest consumer of the fuel - and its domestic production has been declining since the start of the oil price crisis, with a lot of huge fields becoming uneconomical at the lower price levels, in addition to the fields nearing depletion.
Uncertainty about when prices would recover has contributed to the production decline, with output falling to a seven-year low last month of 3.8 million bpd. Over the first ten months of the year, production fell 7 percent to 3.99 million bpd.
Crude oil imports in the first ten months of the year rose by 13.6 percent from January-October 2015, with Russia emerging as the top exporter, overtaking Saudi Arabia and Angola.
Apparently, oil consumption is still robust, despite the economic-model shift that is currently unfolding in China. The shift aims to make it less reliant on heavy industries and fossil fuels but this won't happen overnight. The country will continue to be dependent on volatile international markets for much of the oil and gas it consumes unless it overhauls its domestic production system.
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The upstream oil and gas industry in China is currently dominated by huge state-owned companies such as CNOOC, CNPC, and Sinopec, all of which have suffered their share of profit drops thanks to the lower oil prices.
The news about an opening-up of the upstream sector to private investors seems to indicate that China is dissatisfied with its place as the world's number-two importer, and is also unhappy with how its state-owned giants are exploiting its domestic resources. The reform could see an influx of foreign energy investment in China, despite the low prices.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More