Private enterprises have won the first conventional oil and gas exploitation license, which has aroused heated discussion

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On October 21, Zhongman Petroleum Group Co., Ltd. (hereinafter referred to as "Zhongman Petroleum") announced that it had officially obtained the oil and gas exploitation rights of Wenbei Block in Xinjiang's Tarim Basin on October 19, valid for 20 years, becoming the first private enterprise to obtain a conventional oil and gas block mining license after the state implemented the reform of the oil and gas system.

According to the reporter's understanding, the proven crude oil geological reserves of the Wenbei block are 30.11 million tons, and the proven natural gas geological reserves are 449 million cubic meters, which have the characteristics of shallow burial, abundant reserves and easy exploitation. The relevant person in charge of Zhongman Petroleum told reporters that the acquisition of the mining certificate will help the company to further scientifically plan the subsequent exploration and development of the remaining 709 square kilometers of blocks, which is of great significance to the company's ability to enhance sustainable development and core competitiveness.

"The further development of China's petroleum industry needs to revitalize private capital, attract more social forces to participate in it, and exert the great vitality of the economy under various ownership systems." With the continuous deepening of oil and gas exploration and the continuous advancement of reform, while the upstream is completely liberalized and the number of participants is increasing, it is also facing the challenges of increasing exploration difficulties and more complex conditions for block and resource allocation. In any case, this move has given private enterprises a shot in the arm. An oil and gas block resource evaluator said.

Private enterprises officially enter the "arena"

According to public information, more than 95% of the registered oil and gas resource exploration and development areas in the country are controlled by "three barrels of oil", the prospecting rights obtained by private enterprises account for only 1%, and the mining rights of conventional oil and gas resources are only "three barrels of oil" and extended oil.

On April 14, 2019, the General Office of the CPC Central Committee and the General Office of the State Council issued the Guiding Opinions on Comprehensively Promoting the Reform of the Property Rights System for Natural Resource Assets, which clearly stated that "the oil and gas exploration and exploitation market should be liberalized in an orderly manner, the methods and procedures for competitive transfer should be improved, and a stricter management method for block withdrawal and a more convenient and reasonable management method for block circulation should be formulated and implemented". At present, this problem has been broken. With the landing of a series of policies and measures, the deep-seated contradictions and imbalances in the development of the oil and gas industry are gradually being resolved, and the pattern of the oil and gas industry has begun to be reconstructed.

"Completed the three seismic collections within 1 year and implemented the exploration of wells to obtain discoveries, completed the declaration of oil and gas reserves of the newly recent Jidik Formation in Wenbei Oilfield Wen 7 Block within 2 years, completed all the preparatory work in the early stage of mining rights application within 3 years, and has accumulated more than 160,000 tons of oil in the integrated stage of exploration and production, which is not easy for private enterprises." The acquisition of the mining license in Wenbei Block is conducive to the company's efficient completion of oilfield production capacity construction, increase the scale of production, so that the company's investment and development in oil and gas exploration and development business to achieve a virtuous circle, which has a positive impact on the company's performance. The relevant person in charge of Zhongman Petroleum said.

"If the prospecting rights are compared to the entry ticket of private enterprises to enter the oil and gas industry, then mining rights mean that private enterprises have truly entered the arena of the oil and gas industry and truly integrated into the construction of the national oil and gas industry." But don't just see the short-term benefits of oil and gas block exploration and development, but plan for orderly development. The person in charge added.

Facilitates access to financial support

It is reported that at present, the daily output of the entire Wensu Block Oilfield has reached 700 tons, which is equivalent to an annual output of 250,000 tons.

The relevant person in charge of The above-mentioned Zhongman Petroleum said that the technical reserves and early investment of oil and gas block exploration and development are indispensable. For private enterprises in the domestic oil and gas industry that have entered and are eager to try, being able to obtain mining rights means that the company's oil and gas exploration has been initially successful, the reserves have been implemented and the requirements and conditions have been met, and the oil and gas development of the block can be started immediately, which is a sign of the success of the oilfield stage.

However, in the upstream exploration, private enterprises also have many "troubles", the most lacking of which is financial support. The oil and gas industry has the characteristics of large investment, high risk and high return, while private enterprises are easily affected by capital and risk control, and financing difficulties and expensive financing are difficult problems that restrict private enterprises from entering the field of oil and gas exploration and development.

The above-mentioned oil and gas block resource evaluation person said that after the "first grasp" of the mining voucher, the nature of the mining right in Wenbei Oilfield changed from prospecting right to mining right, and the company obtained the license for oilfield drilling and development wells and production, coupled with the oil price is currently at a high level, Zhongman Petroleum can use its own integration advantages to achieve rapid production of large-scale batch drilling and development wells, which will help accelerate the company's cash return.

"With the mining rights, with the large-scale drilling and commissioning of the development well, the cash flow of the project will increase rapidly, and with the cash flow, it can raise funds from financial institutions to provide financial guarantee for the rapid production of the oilfield." The relevant person in charge of the above-mentioned China Manpower Petroleum said.

Safeguards need to be improved

At present, the main body of conventional oil and gas markets is relatively single, and the number of participating enterprises is small. Industry insiders suggest that it is necessary to establish a diversified investment model, under the premise of giving play to the dominant position of state-owned oil companies, introduce local capital, social capital and foreign capital into the conventional oil and gas upstream market, absorb advanced production factors, increase investment in the exploration and exploitation of peripheral, deep, low-grade, small-scale and difficult-to-recover oil and gas resources, and promote the quality and efficiency of conventional oil and gas exploration and exploitation.

More importantly, the relevant departments should continue to carry out constituency evaluation and actively look for favorable replacement areas. For exploration blocks that have not yet broken through and still need to be continued, strengthen the evaluation of constituencies as soon as possible and prepare continuation plans in advance; at the same time, closely track the exploration and continuation of exploration and registration blocks of other oil and gas companies, do a good job in advance of the selection evaluation and analysis of other oil and gas companies' proposed continuation or reduction blocks, and actively do a good job of demonstration of the proposed registered blocks and preparation for participation in bidding.

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