China to change heavy reliance on spot trade in crude oil

Updated: 2007-12-28 10:26

China will gradually change the current situation where it overly relies on spot trade in crude oil. In future, it will encourage domestic companies to sign long-term contracts for oil supply, according to a white paper issued by the State Council Information Office on Wednesday.

For a considerable long time to come, international energy trade will remain as the main form for China to utilize foreign oil resources. China will actively expand its international energy trade, to boost the balance of oil supply in global market and to maintain the stability of international energy market. When conditions are mature, China will support domestic companies to invest and operate at overseas market, the white paper, titled "China's Energy Situation and Policies", says.

According to the white paper, China encourages foreign businesspeople to make investment in the exploitation of non-conventional energy resources and in the construction and operation of oil (natural gas) pipelines, storage houses and piers. China also supports foreigners to invest in hydropower plants.

Foreign investors engaged in exploitation of minerals paragenesis, associated mineral resources, tailings, or mineral resources in the western region will be exempted from paying the mineral resources compensation fees. Meanwhile, Chinese government encourages foreign businesspeople to invest in thermal power plants with a single dynamo capacity of 600,000 kilowatts or above, to invest in clean coal power projects, energy production projects that combines heat and electricity, hydropower projects, nuclear power projects where Chinese companies are the major shareholders, and to invest in the construction and operation of both new and renewable energy resources.

China will expand foreign investment utilization scope by encouraging the investment to flow to energy field. The main areas for foreign investment will shift from fossil energy resources to renewable energy resources and from exploitation to service trade.

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