6.875
%
Neutral
47
mm boe
40
%
While the PSC regime is generally adhered to, there has been concern over the variable application of legal principles, and the anti-espionage and data laws, export controls and US–China tensions have raised risks for foreign firms. CNOOC continues to offer blocks to foreign partners, but access remains selective. Outlook maintained because improvements in the PSC regime are offset by geopolitical and legal risks. Outlook: Neutral. Risk premia unchanged at 6.875%.
October 7, 2026
Asia - South East
mm bbl
bcf
Eastern Asia, bordering the East China Sea, Korea Bay, Yellow Sea, and South China Sea, between North Korea and Vietnam.
PSC/PSA
Complex Production Sharing Contract ("PSC")-based fiscal regime. State companies have the right to take up to 53% working interest in any commercial development, carried through exploration phase with no reimbursement for exploration expenses. Under certain onshore contracts, the contractor is solely responsible for all pilot phase and production phase development costs.
China remains a one-party state under Xi Jinping, with slowing growth, a protracted property downturn and recurrent trade conflict with the US, including the 2025 tariff escalation and truce. US and UK guidance highlight market-access restrictions under the negative list, forced technology transfer, data and anti-espionage laws, exit bans, and regulatory and political risk for foreign firms. The EIA notes that China is the world's largest crude importer, with record domestic output driven by the NOCs, including shale gas in Sichuan. Foreign upstream participation is largely limited to offshore production sharing contracts with CNOOC.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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