China to open up oil and gas markets

New regulations were unveiled Wednesday by the Ministry of Commerce which will allow foreign companies to invest in crude oil wholesale and storage in China as well as wholesale distribution and retail sales of petroleum products. The changes are being made in accordance with China's WTO accession obligations and will come into effect January 1, the Wall Street Journal reported. Foreign companies will have to meet a minimum capitalization requirement of US$12.8 million and incorporate their business locally in order to participate. The country's four major oil and gas firms – China National Petroleum Corp, China National Offshore Oil Corp, China Petroleum & Chemical Corp (Sinopec) and Sinochem Corp – are expected to remain dominant. Energy sector reform is likely to be a slow process as the government wants to retain as much control as possible.