Foreign oil companies are pessimistic about investment opportunities in China’s upstream petroleum sector, mainly because of the technology needed to produce oil from the complicated geological blocks offered to them, industry officials said.

Some foreign companies have completely withdrawn from China’s onshore oil exploration and production sector, while a few are still looking for offshore opportunities, but without much hope, said senior delegates attending China Oil & Gas Development Forum held in Shanghai.
“The geology of China’s oil bearing basins is complicated and most big foreign oil companies are not interested in them,” Liu Keyu, deputy director of CNPC Economy & Technology Research Center, told Dow Jones Newswires.
He said BP PLC (BP) scrapped its E&P division in China a few years ago after drilling a few dry holes in some offshore and onshore basins.
BHP Billion (BHP) left China five years ago after failing to find crude reserves of commercial value in China’s offshore waters.
Liu said it is impossible for foreign companies to aggressively invest in China’s upstream sector in the future.
Chinese companies don’t want foreign companies to explore and develop areas with easy geological structures, said a delegate from an overseas company.
He said what China needs now is the technology, not the money, to explore and develop its “difficult blocks.”
However, the sophisticated foreign technology isn’t readily accessible to Chinese companies these days because of the growing expense involved, he added.