China seeks help of international oil firms

The People's Republic of China is developing a 20-year plan to make the country a major oil producer by the turn of the century. Seemingly abandoning the pre-1977 policy of independence and self-reliance, the country has recognized that foreign technology and foreign capital are necessary to exploit its vast oil reserves. Agreements signed recently with western and Japanese oil companies, large acquisitions of U.S. drilling and production equipment, and the admission into China of numerous western petroleum interests signal the country's new aggressive exploration and production policy. The major interest so far has been in offshore exploration and development, where China lays claim to areas disputed by her neighbors. Recently, however, there have been indications that China would also consider foreign contracts for onshore exploration. The organization of China's petroleum authority as well as the potential petroleum reserves are uncertain at this time. However, some of the agreements with foreign entities provide a glimpse of the new petroleum policy. (SAC)