The hottest private capital must cross three doors

2022-08-21
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Private capital must cross the triple gate to enter the oil and gas field

the relatively open downstream industry in the oil and gas field forms a sharp contrast with the almost absolute monopoly upstream industry. "New 36" takes the oil and gas "with the most powerful traditional monopoly power, which is undoubtedly a kind of courage

is private capital free to choose whether to invest in profitable upstream exploration and development or the construction and operation of midstream pipelines with stable return on investment? Can you participate in investment and share profits with money? Is the door of private investment in oil and gas open or half hidden or even "glass door"? The answer seems not so simple

exploration and production "glass door"

"policies in many fields of oil and gas have never said that private capital is not allowed to enter." Gao Shixian of the Energy Research Institute of the national development and Reform Commission told the China Securities Journal that many times, private capital is unable to reach or enter its own capital scale and technical capacity, or is not satisfied with the existing investment return, so it is unwilling to enter

many industry insiders interviewed expressed the same view: private capital hopes to enter the lucrative upstream field of oil and gas. However, analysts said that even if the policy did not set up a wall on private capital in the upstream of oil and gas exploration and exploitation, it did not mean that private capital could really enter and leave freely. As for calling for the liberalization of crude oil import rights to private enterprises, it would directly touch the monopoly profits of oil companies, which would be even more difficult

first of all, the domestic developed and potential oil and gas blocks have been divided, and it is impossible for private capital to get blocks suitable for exploration and production. Secondly, private capital does not have enough technical level and financial strength to invest in risk exploration and exploitation. "Private capital is characterized by sufficient capital, but the technology involved in relevant industries is not mature." Zhang Zhenghe, deputy director of the operation and Management Department of the central enterprise Zhonglian coalbed methane company, told the China Securities Journal

as a result, at present, the participation of private capital in the upstream is mainly in the field of oilfield services, rather than directly carrying out exploration and production, concentrating 500million yuan per year. There may be "glass doors" in the field of exploration and production

it is noted that according to the IPO prospectus of quasi oil shares, the predecessor of the company, quasi oil technology, came from the separation and restructuring of the main and auxiliary parts of the Zhundong oil production plant of PetroChina Xinjiang Oilfield Company, and the management of the company used to be the employees of quasi oil technology. This inextricable connection with oil companies naturally helps to continue to obtain some related businesses of oil companies after divestiture

"without any background, it is too difficult for private capital to get involved in oil and gas, especially exploration and development and service fields, even in the blocks that oil companies give up development." An old expert who has been in the energy industry for many years shook his head frequently

Zhang Zhenghe also pointed out that if private enterprises want to participate in oil and gas exploration and production, they need to apply to the industrial and commercial department to expand their business scope. How to review their qualifications, that is, market access conditions, is still a problem

Han Xiaoping, chief technical director of China energy, once told that China's natural gas industry has been monopolized for 30 years, and its output and consumption are less than 100billion cubic meters, which only shows that oil companies have not invested enough force, and their enthusiasm for developing the natural gas industry will not be higher than that of developing the petroleum industry

"encouraging private capital to participate in shares is a little wishful thinking. State owned enterprises lack the sense of return, but it is still realistic in the open market." Han Xiaoping said

the "shutter door" of the midstream pipeline

"compared with the oil and gas exploration and production field with high investment, high risk and high return, the investment return of the midstream oil and gas pipeline construction is stable and the most obvious benefit, which may become a field in which private capital is involved more." Zhang Zhenghe said. This field, where private capital has infiltrated, is described as a half covered "shutter door"

Yang Jianhong, a pipeline expert of CNPC General Planning Institute, told China Securities News that private capital has participated in, controlled or even solely invested in the construction of natural gas branch pipelines in Henan, Jiangsu and Hunan to accelerate the development of domestic new materials. "The internal rate of return of these branch pipelines built by private capital can reach the market average level of 12%. In addition to the construction of 3. There is contact between the toothed rod pressing and the toothed rod, the pipeline operation is also left to them, and the operators charge pipeline transportation fees." Yang Jianhong said

however, he pointed out that private capital mainly relies on the strength of local governments

many local governments have planned local oil and gas pipelines by themselves, and then connected with the large-scale trunk pipeline of PetroChina. By reaching an agreement with the local government, private capital obtains the construction and operation right of the branch pipeline, mainly obtaining income such as pipeline transportation fees, which are controlled by the state. PetroChina still controls the gas source and downstream market. Because more than 70% of downstream customers must be identified when the pipeline project is approved, private enterprises as pipeline operators do not have gas sources at their disposal

"PetroChina has not completely given up the planning and construction of branch lines, and many times it is' one line one discussion '." Yang Jianhong said that PetroChina should talk with local governments, pipeline and gas companies about whether private capital will participate and how much

however, the construction and operation of large-scale trunk pipelines are still firmly in the hands of oil companies. "It's impossible to let go." The old expert of the aforementioned oil company told the China Securities Journal, "if the oil company can't control the main pipeline, the control of downstream demand will lose its power. Even the participation of oil companies in the main pipeline is mutually exclusive, not to mention private capital."

the first line of West to east gas transmission has considered that ExxonMobil, shell and Gazprom each have 15% shares, PetroChina has 50% shares and Sinopec has 5% shares. However, foreign capital and Sinopec withdrew one after another, and finally PetroChina was solely invested in the construction and operation. After that, domestic large-scale primary pipelines are basically constructed and operated by oil companies

from the project approval to the planning of oil companies, there are very high requirements for the qualification and scale of joint-stock companies. "Private capital can only engage in some small bid sections, such as general auxiliary projects with low technical requirements. If they participate in the construction of large-scale long-distance pipelines, their ability is not enough." Zhang Zhenghe said

in addition, PetroChina also hopes to integrate the large-scale production of coalbed methane into the main pipeline while planning the construction of domestic natural gas main pipeline, but this idea was immediately strongly resisted by private capital. A person from a CBM market sales company said sharply: "this emerging industry has already had a variety of state-owned, local, private and foreign capital. If the gas source is collected to PetroChina through entering the trunk pipe, will the downstream market of CBM be subject to PetroChina like natural gas?"

analysts pointed out that it is possible to build long-distance pipelines for the export of coal based natural gas in the future, because the scale of coal based natural gas currently launched is often tens of billions of cubic meters, which cannot be incorporated into the existing long-distance pipelines and can only be built. However, in addition to central enterprises, most of those who are able to build large-scale coal to natural gas projects are local state-owned enterprises with strong strength. It is difficult to say whether private capital can participate in the project

downstream sales "revolving door"

in the upstream, middle and downstream of the oil and gas industry, the only door open to private capital is the downstream product oil sales and urban gas field. The income of private capital is subject to the frequent changes in the development strategy of oil companies and national policies, and will be thrown out by the "revolving door" if you are not careful

dongxiucheng, deputy dean of the school of Business Administration of China University of petroleum, pointed out that in terms of gas stations, PetroChina and Sinopec account for half of the country, private and foreign-funded storage enterprises account for 2/3, and private enterprises account for 2/5 in wholesale enterprises. Although private capital still faces the government pricing risk of the retail price of refined oil, and the restrictions of state-owned oil companies on crude oil quotas and the wholesale price of refined oil, its existence has become the most powerful driver of market price competition in terminal gas stations

private capital has bloomed everywhere in the field of urban gas. At present, the large-scale urban gas companies in China are mainly private companies. In cities that have formed a certain management scale, the profitability of private gas companies with a high degree of marketization is good, and the gross profit rate can reach more than 30%, while many state-owned gas companies are in general operation

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Chi Guojing, Secretary General of China Urban Gas Association, said to:" for private capital, it was difficult for large and medium-sized cities to enter in the past, or the proportion of shares was relatively low. Strong local governments tend to support their own local gas companies. " He pointed out that with the government's incentive policies for private capital and the diversification of China's natural gas resources and the continuous improvement of supply, the terminal bargaining power of local governments will be improved, which is conducive to the development and growth of private and foreign capital

"however, private gas companies are also seeking to develop in the middle and upper reaches." Chi Guojing said. ENN gas, the largest private gas company in China, has formed a clean energy industry chain of energy distribution, energy chemical industry and solar energy based on urban gas

note: the reprinted content is indicated with the source. The reprint is for the purpose of transmitting more information, and does not mean to agree with its views or confirm the authenticity of its content

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