Although MOFCOM approval is no longer required for a
Sino-foreign petroleum contract 1, the State Council has
decided that the Chinese party must still "report and deliver
information about the signed petroleum contract" to
The relevant State Council Decision 2, which was made
on July 18, 2013 and became publicly available on July 26, 2013,
amends the regulations 3 relating to the exploitation of
onshore and offshore petroleum resources in China. The relevant
amendments are set out in paragraphs (a) and (b) below.
These amendments follow the State Council's decision
4 in May 2013 to remove the need for MOFCOM's
approval for petroleum contracts. For more information about this
decision, please see our previous
Client Alert5 dated May 2013.
Information to be provided to MOFCOM
As a result of the State Council Decision, after the relevant
Chinese company (i.e., CNPC or Sinopec Group for onshore
exploitation and CNOOC for offshore exploitation) enters into a
petroleum contract with a foreign company, it must submit
information about the contract to MOFCOM.
The requirements for submitting information about a petroleum
contract have not yet been made publically available. It is not
clear what type of information is to be provided to MOFCOM and
within what timeframe. It is also uncertain whether a copy of the
petroleum contract needs to be filed with MOFCOM.
Chinese party can determine its foreign
The relevant Chinese oil and gas company now has an express
right to determine which foreign company will be a party to the
petroleum contract as set out in the revised regulations
6. Prior to the State Council Decision in July 2013,
this right was not expressly set out in the regulations.
Previously, the Chinese company could choose the foreign company
with whom it wished to enter into a contract. However, MOFCOM's
approval was still needed to validate the contract, which gave
MOFCOM ultimate discretion to decide which foreign company could
enter into a petroleum contract.
1A contract on Sino-foreign cooperative
exploitation of (onshore / offshore) petroleum resources, for
example, a production sharing contract.
2"Decision on the Cancellation and
Amendment of Certain Administrative Regulations (State Council
("State Council Decision").
3Regulations on Sino-foreign Cooperative
Exploitation of Offshore Petroleum Resources ("State
Council Decree No. 607")
and the Regulations on Sino-foreign Cooperative Exploitation of
Onshore Petroleum Resources ("State Council Decree No.
Article 7 of the State Council Decree No. 607 and Article 8 of the
State Council Decree No. 606 have been amended.
4"The State Council Decision on
Cancellation and Delegation of a batch of Projects subject to
Administrative Approval and other items (Guo Fa (2013) No.
5Client Alert dated May 2013 entitled
"MOFCOM Approval on Sino-Foreign Petroleum Contracts No Longer
6The State Council Decree No. 606 and the
State Council Decree No. 607.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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