consumption, if non-fossil energy subsidies are
not introduced the widespread use of non-fossil
energy would be difficult to achieve and the
adjustment of the energy mix would be slow.
In the combined policy scenario, fossil energy
consumption can be reduced and subsidy support
given to non-fossil energy. Under the joint action
of the two policy types, the effects of energy mix
adjustments can be very significant. Model
analysis results show that by combining carbon
pricing at $30/tCO 2 e with subsidies of 30%, the
proportion of non-fossil energy in the energy mix
can be increased to 50% by 2050. This indicates
that a combined policy mechanism is both
effective and necessary to promote future energy
transformation and an energy revolution.
4.5 Build a New System for Oil
and Gas Management
and Operation
In line with the overall requirements of Several
Opinions on Deepening Oil and Gas Sector
Reform published by the Central Committee of
the CPC and the State Council, China will promote market-oriented reform throughout the
entire oil and gas value chain. The objective is to
build a modern oil and gas market system that
features fair competition, openness and orderliness, a strong legal foundation and effective
regulation by around 2030.
4.5.1 Reform the Mining Rights
Management System
for Oil and Gas to Help
Create a Mining Rights
Market
Reform the franchise system for oil and gas
exploration and production and deregulate the
mining rights market in an orderly manner.
While single-level mining rights management
continues, a shift from allocation to tendering
should be made. In high-risk areas, exploration
rights may be freely transferred by means of
invitation for bids, open bidding, exploration
plans or investment, or joint venture/cooperation.
In proven or low-risk areas, mining rights should
be transferred (sold) according to their valuation.
Set a reasonable cost of ownership for mining
rights and resolve the relationship between
resources and income. Different minimum
exploration investment standards should be set
for different regions, different minerals and different oil and gas resource areas at different
stages of exploration. In particular, the minimum
exploration investment thresholds for the first
and second years should be raised, while those
for the third year should be raised if needed.
Establish an exit compensation mechanism
and speed up the transfer of mining rights and
reserves to improve resource utilisation. To
acquire the exploration rights after a licence
holder exits, the prospective owner (the relevant
national government authority or other applicant)
should compensate the licence holder
accordingly.
Reform the franchise for joint operation with
overseas companies and improve domestic oil
and gas capacity. China will deregulate the
franchise of the three major state-owned oil and
gas companies (CNPC, Sinopec and CNOOC)
for cooperation with foreign companies in
onshore exploration and allow other companies
to make independent decisions consistent with
government regulations. The franchise for offshore cooperation should also be steadily
deregulated.
4.5.2 Accelerate Reform of the Natural
Gas Pipeline Network
and Build an Independent
and Diversified Oil and Gas
Infrastructure Market
Take steps to promote orderly pipeline independence. In the medium and long terms, pipeline
transmission companies will take steps towards
financial, legal and ownership independence to
accelerate the separation of pipeline management, sales and storage. This will ensure open
and fair access to third parties and improve
pipeline utilisation.
Improve laws and regulations and strengthen
supervision to ensure fair access. The Measures
34
X. Zhaoyuan and M. Ishwaran
not introduced the widespread use of non-fossil
energy would be difficult to achieve and the
adjustment of the energy mix would be slow.
In the combined policy scenario, fossil energy
consumption can be reduced and subsidy support
given to non-fossil energy. Under the joint action
of the two policy types, the effects of energy mix
adjustments can be very significant. Model
analysis results show that by combining carbon
pricing at $30/tCO 2 e with subsidies of 30%, the
proportion of non-fossil energy in the energy mix
can be increased to 50% by 2050. This indicates
that a combined policy mechanism is both
effective and necessary to promote future energy
transformation and an energy revolution.
4.5 Build a New System for Oil
and Gas Management
and Operation
In line with the overall requirements of Several
Opinions on Deepening Oil and Gas Sector
Reform published by the Central Committee of
the CPC and the State Council, China will promote market-oriented reform throughout the
entire oil and gas value chain. The objective is to
build a modern oil and gas market system that
features fair competition, openness and orderliness, a strong legal foundation and effective
regulation by around 2030.
4.5.1 Reform the Mining Rights
Management System
for Oil and Gas to Help
Create a Mining Rights
Market
Reform the franchise system for oil and gas
exploration and production and deregulate the
mining rights market in an orderly manner.
While single-level mining rights management
continues, a shift from allocation to tendering
should be made. In high-risk areas, exploration
rights may be freely transferred by means of
invitation for bids, open bidding, exploration
plans or investment, or joint venture/cooperation.
In proven or low-risk areas, mining rights should
be transferred (sold) according to their valuation.
Set a reasonable cost of ownership for mining
rights and resolve the relationship between
resources and income. Different minimum
exploration investment standards should be set
for different regions, different minerals and different oil and gas resource areas at different
stages of exploration. In particular, the minimum
exploration investment thresholds for the first
and second years should be raised, while those
for the third year should be raised if needed.
Establish an exit compensation mechanism
and speed up the transfer of mining rights and
reserves to improve resource utilisation. To
acquire the exploration rights after a licence
holder exits, the prospective owner (the relevant
national government authority or other applicant)
should compensate the licence holder
accordingly.
Reform the franchise for joint operation with
overseas companies and improve domestic oil
and gas capacity. China will deregulate the
franchise of the three major state-owned oil and
gas companies (CNPC, Sinopec and CNOOC)
for cooperation with foreign companies in
onshore exploration and allow other companies
to make independent decisions consistent with
government regulations. The franchise for offshore cooperation should also be steadily
deregulated.
4.5.2 Accelerate Reform of the Natural
Gas Pipeline Network
and Build an Independent
and Diversified Oil and Gas
Infrastructure Market
Take steps to promote orderly pipeline independence. In the medium and long terms, pipeline
transmission companies will take steps towards
financial, legal and ownership independence to
accelerate the separation of pipeline management, sales and storage. This will ensure open
and fair access to third parties and improve
pipeline utilisation.
Improve laws and regulations and strengthen
supervision to ensure fair access. The Measures
34
X. Zhaoyuan and M. Ishwaran