Analysis On The Political And Legal Risks Of China Overseas Petroleum Investment

In the field of international investment, there has been no major development ofinbound investment into China in recent years, in the contrary, as the fast economicdevelopment and the capital accumulation of China, also with the state economicstrategy of "Go-Out", many Chinese investors have chosen to invest in other countriesoutside China. The "Go-Out" situation has been promoted by the global financialcrisis which started in2008and then extended to the whole world. Among the manyoverseas investments, petroleum investment is a key field. Whereas, the demand forpetroleum due to the overwhelming economic growth and the fact that the shortage inthe supply of petroleum from Chinese market make the "Go-out" to invest inpetroleum a inevitable choice for China and Chinese enterprises.Overseas investment has a lot of risks due to the fact that the investment is madeoutside China. There has been too many uncontrollable factors. With regard to thepetroleum investment, it shares the common risks of overall overseas investment, onthe other hand, it has other specific political and legal risks due to its characteristicssuch as the investment destinations and sensibility of petroleum itself. Such politicaland legal risks will not only affect the benefit of the enterprise itself, but also has an influence on the interest of the country and maybe has compact on the internationalrelationships among different countries. For example, the Libya war and Iraqi warboth have affected Chinese overseas petroleum investment.Current studies on the overseas petroleum investment mostly focus on thetheoretical studies and the overseas insurance system, however, have very fewanalysis on the current cases and further to find how to reduce the risks which lie inthese cases. This article firstly focus on the overall situation of China overseaspetroleum investment, then introduce the investment which has been made by thethree big Chinese national oil companies, finally comes to the key part of this article,which is the political and legal risks of overseas petroleum investment using the caseanalysis method. The foregoing study method makes this article more practical andmeaningful.