China state oil firms clash over ownership rights -Global Times

Yanchang Petroleum International

04/09/2018 06:20

SHANGHAI/BEIJING, Sept 4 (Reuters) - Workers with two
state-owned Chinese oil developers fought with sticks, shovels
and Molotov cocktails in a dispute over prospecting rights in
the northwest province of Shaanxi, the state-run tabloid Global
Times reported late on Monday. 
    Local police have begun an investigation into an "escalating
dispute" between PetroChina Changqing Oilfield Company, a
subsidiary of China's biggest oil and gas producer PetroChina
 601857.SS , and Shaanxi Yanchang Petroleum Group  0346.HK ,
which is owned by the provincial government, the paper reported.
 
    Five people were hurt at the weekend in what was the third
violent showdown this year between the two companies, the paper
said. The dispute concerns development rights for the Zizhou gas
field, which are claimed by both sides, the Global Times said.
    The gas field is run by PetroChina Changqing but the local
government also granted drilling rights in the area to Yanchang
Petroleum earlier this year, the Chongqing Morning Post
newspaper reported on Sunday. 
    The local government and public security bureau declined to
comment when contacted by Reuters on Tuesday. Yanchang
Petroleum, PetroChina and the state giant's subsidiary also all
declined to comment.
    The case highlights the tensions between central
government-run firms and regional authorities desperate to
retain control over lucrative energy and mineral resources. 
    China has long kept a tight grip over its energy reserves,
and normally allows only major central government-run companies
like PetroChina or its rival Sinopec  600028.SS  to develop oil
and gas. 
    In the 1990s, Shaanxi allowed private citizens around the
city of Yulin to drill for oil in a bid to alleviate crippling
poverty, but Beijing ordered the province to stop the practice
amid concerns about safety and pollution, and as PetroChina 
complained about infringement of its exploration rights. 
    As a compromise, Shaanxi was given special dispensation in
2007 to amalgamate several private oil and gas projects under
its own local state enterprise, allowing it to receive more tax
revenues from local oil and gas production. 
      

 (Reporting by Meng Meng, Aizhu Chen and David Stanway; Editing
by Tom Hogue)
 ((david.stanway@thomsonreuters.com; +86 21 6104 1799; Reuters
Messaging: david.stanway.thomsonreuters.com@reuters.net))