China’s remarkable economic development and the enormous spike in energy imports have made the country an important hub for a few of the world’s largest energy exporters. The fracking revolution in the United States and the ever-growing role of EVs in the west has made Asia the major buyer of fossil fuels. China has a very modest energy reserve so the country is dependent on imports to meets its domestic demands. Asian countries were earlier able to meet their energy demands by producing almost 4 million barrels per day from their local oil fields and now twenty-five years later the ratio of imported oil dependency has reached a staggering 70 percent.
The level of reliance has reached high and there is a disruption in Beijing which created a security risk. The Chinese government is insisting local oil fields to increase their production for minimalizing the dependency. China’s ‘big three’ oil producers, PetroChina, Sinopec, and Cnooc have produced mixed results and have significantly increased their products adhering to the Government’s request. Central Government in Beijing holds controlling stakes in the country’s three largest energy companies and after the request, the companies have agreed to invest 517 billion yuan ($77 billion) cumulatively in the domestic upstream functions.
Energy giants in China has profited significantly due to the country’s closed-door policy and this became an important factor for their success. Beijing doesn’t give perks for free and they expect the companies to respond to the government’s call. The limitation has not halted the three companies’ growth so both the parties are aligned together to continue their relationship.