Comparison And Research In International Petroleum Contract Modes

1 Proposition background and significanceChinese Petroleum companies start extensive"walk out"strategy to acquire overseas hydrocarbon resources under the consideration of national energy safety. Therefore, acknowledging and properly utilizing international petroleum contracts becomes a more and more urgent task.As strategic resources, Petroleum& gas count for much in national economy and society development and is also closely related to national safety. Currently, China has become the third largest country after USA and Japan in amount of crude oil importation. The petroleum importation dependence degree has increase from 7.6% in 1995 to 47% in 2006 ( statistics from《China Energy Development Report》). China petroleum consumption would reach 500 million tones and 300 million tones of them need importation from foreign countries. The importation dependence degree would reach 60% which exceed USA current 50%. Accordingly, China energy safety, especially petroleum safety would become more and more extrusive.For the purpose of resolving the supplying- demanding contradiction,'walk out'strategy becomes a necessity and must solution. It is also an effective way to safeguard our country's petroleum safety and economy safety. Meanwhile, with expediting of globalization of petroleum economy, Chinese petroleum companies will become more and more important in areas of international petroleum exploration& production, petroleum supply, petroleum investment and creating multinational companies. Furthermore, China will also become constitutor and mender of related laws and regulations in international petroleum politics and economy systems. Actualizing multinational prosecution strategy is also Chinese petroleum enterprises'effective way of self-surviving and developing in the new competition environment after china entry into WTO.Under the driving force of economy globalization and shortage of domestic petroleum resources, Chinese petroleum industry has been on the road of developing overseas investment and exploiting overseas petroleum resources from 90th of 20th century. After almost 10 years'efforts, our petroleum companies have successfully founded petroleum production basis in overseas countries and produce 50 million tones of quotient oil which contributes a lot in fetching up domestic energy shortage and ensure smooth development of national economy.However, we are still in primary stage of this"walk out"strategy. Firstly, we met issues of international petroleum contracts. We could get good projects and manage them well on the precondition of mastering modes and features of different petroleum contracts, regulations and particular requirements in different resources countries. Only on the basis of above mentioned preconditions, we could deal with overseas petroleum projects by international rules properly.Chinese petroleum industry make a long progress in marketization and internalization since reforming and opening up, especially after china entry into WTO. In upstream, China regulates the market by limitation method under which only several national petroleum enterprises have permits of entry into the overseas market. In recent 10 years, Chinese petroleum industry carried out a series of reforms. In 1998, we founded two biggest group corporations--CNPC and SINOPEC under the thought of incorporating upstream and downstream. From then on, Governmental function is separated from these petroleum enterprises.After approximately 2000, China realized entry into overseas stock market through the three biggest national petroleum enterprises and import overseas strategic investment partners. However, there are still a lot of problems in Chinese petroleum industry's marketization and internationalization.Firstly, Property right regulation of petroleum resources has not been created in deed. The Government's ownership has not been clearly separated from enterprises'management rights. We have not set up one proper regulation for petroleum resources'ownership, management right and rights of utilization and disposition.Secondly, Petroleum industries especially upstream industries are mainly monopolised by the three biggest national petroleum enterprises. Foreign companies could enter into the market in limited range and civil companies still have no entry permit till now. Thirdly, Chinese government mainly utilizes administrative measures to manage petroleum industries. The three biggest national petroleum enterprises divided by zones and the marketization competition mechanism has not been inducted in granting process of petroleum resources permits. The Utilization of petroleum resources has not truly reach the standard of effectiveness, fairness and repayment.The existing reason of the above mentioned problems is we do not deal with petroleum resources as assets and to manage these resources by international regulations& traditions by legal concept and by international universal petroleum contract modes.2 Demonstration Theme and contentsAbout conception of international petroleum contract:International petroleum contract is a kind of international cooperation contract made by resources country (or represented by national petroleum companies) for the purpose of cooperation with foreign petroleum companies in aspects of petroleum exploration, production, development and sales.International petroleum contract owns the normal legal features and economic features of ordinary contracts. However, the contract also has unique features which ordinary contracts do not have. For instance, modern international petroleum contract is recognized as combination of both international public contract and private contract of resources country. Private law contents are natural result of contract deliberation and commerce features. Public law includes government control, supply obligation in domestic market, government share and HSE, etc. which are introduced by foreign petroleum companies. International petroleum contract also belongs to the category of international service trade contract since it could bring investment and technical services into amphitryon countries.International petroleum contract owns significant historical and actual functions. The creation and optimization of international petroleum contract is need and result of petroleum market development. With the development of specialization and marketization of international petroleum market, the international petroleum exploration and development cooperation realized through signing international contracts by resources country and international petroleum companies. International petroleum contract is not only effective legal document for regulating and constraining rights and obligations of double sides, but also a level and criteria of income distribution between resources countries and contractors.The external petroleum cooperation is realized through signing and implementing international petroleum contract. Stage by stage, hydrocarbon resources country developed and formed a series of relatively mature and fixed petroleum cooperation contract mode on the basis of combining petroleum industry development situation, petroleum legislation situation, economic situation, opening up situation of petroleum market, homeland resources situation and petroleum resources dependence degree.The composer of this article has more than ten years work experience in international petroleum contract projects. Through demonstrating definition, function and principle of international petroleum contracts, the article makes a thorough classification, comparison and research in international petroleum contract's creation, evolution and main contents with abundant examples of some countries'petroleum contract modes. The aim of this article is to demonstrate and introduce different petroleum contracts'advantages, disadvantages and development rules, together with analysis to Chinese petroleum and energy industry situation so as to bring forward referring international petroleum contract modes and make contribution to China petroleum legal system construction.3 Innovation aspects of the thesisThe thesis involves in international investment and service areas and energy law system. The thesis not only reflects features of ordinary economy contracts'basic regulations and private law, but also probes into public law features such as national energy law system and energy management systems.Represented by UAS, western countries own more than one hundreds years of petroleum development history. They have created clear management system to petroleum resources and assets on the basis of private ownership. They own thousands petroleum companies not only include world-class multinational petroleum companies such as Exxonmobil, Chevron Texaco, but also a lot of middle& small size petroleum companies. They own absolute predominance in multinational deals and occupation percentages in global petroleum resources. Western countries have created one set of mature system in the areas of petroleum legislation, judicatory system, petroleum law services, petroleum law and international petroleum contract modes. They published a lot of articles and books related to petroleum law and in areas of comparison of international petroleum contract modes, etc. However, these theories mostly created on the basis of private ownership to petroleum resources. They do not have thorough analysis in areas of referring international petroleum contract modes for such country as china which not only need to marketization, internationalization of her petroleum resources, but also need ensuring national economy safety and avoiding loss of state owned assets.In china, complete petroleum law does not have foundation basis and necessity because petroleum resources have not been fully put into market and only monopolized by several national petroleum enterprises. Accordingly, the research in petroleum law and international petroleum contract modes is relatively left behind.4 Significance in theory and practiceWe hope this thesis could make contribution to China petroleum law theory, international energy comparison law system and energy law construction of China and even the whole world.In Nov. 2005, China National Development And Reforming Committee launched again the composition work of《Petroleum Law》and in second half of 2006, China National Energy Committee publicly solicit proposals among all citizens.Under historical and current situation, Petroleum legislation is imperative. Furthermore, China petroleum legislation is not to maintain current situation, it is to refer to universal petroleum contract modes, to make the legislation more effective, fair and on the height of marketization and globalization.