| Circular of the Ministry of Commerce, National Development and Reform Commission and Ministry of Land and Resources on Relevant Issues concerning Further Expansion of Foreign Cooperation on Coal-bed Gas Exploitation |
| Wednesday,October 17,2007 Posted: 15:15 BJT(0715 GMT) |
| From:FDI Article type:Reproduced |
Shang Zi Han [2007] No. 94 Competent commercial departments, development and reform commissions, competent departments of land and resources of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and Xinjiang Production and Construction Corps, China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec), China National Coal Group Corporation, Shenhua Group Co., Ltd. and China United Coal-bed Methane Co., Ltd.: For the purpose of improving the control and utilization of coal-bed methane (coal-mine gas), introducing and making full use of foreign advanced technology to prospect and exploit coal-bed methane so as to realize the goal of energy-efficient development, clean development and safe development, related issues on further expanding foreign cooperation on coal-bed methane exploitation, upon approval by the State Council, are hereby notified as follows: 1. In accordance with the principle of disintegrating the sole dealing system and admitting experienced and competent enterprises both at home and abroad into the exploitation of coal-bed methane while at the same time avoiding a situation of "multi-layer system against foreign enterprises", the Ministry of Commerce and National Development and Reform Commission jointly with relevant departments shall select, apart from China United Coal-bed Methane Co., Ltd, certain number of enterprises to carry out pilot exploitation of coal-bed methane in cooperation with foreign enterprises within regions designated by the State Council. 2. Pilot enterprises shall fairly boast the capacity of coal-bed methane exploitation and some experience of cooperation with foreign enterprises. Good records of law-abiding, sufficient capital and coal-bed methane mining right or coal mining right in a certain area including those within the cooperation plan shall be essential prerequisites. The name-list of pilot enterprises shall be determined by Ministry of Commerce and National Development and Reform Commission together with relevant departments through discussion. Large-size state-owned mining enterprises are particularly encouraged to take part in this program. Relevant issues concerning pilot enterprise application are notified as follows: (1) Procedure of Application The applicant enterprises shall, after preliminary examination by competent commercial departments and development and reform commissions at the provincial level, lodge an application with Ministry of Commerce and National Development and Reform Commission. Enterprises directly under the Central Government may directly lodge an application to Ministry of Commerce and National Development and Reform Commission. (2) Application Materials (a) Reasons of participating in the pilot program of coal-bed methane exploitation in cooperation with foreign enterprises; (b) Basic information of the enterprise, including the scale, main business, the status quo and future development planning; (c) Fund and Credit of the enterprise, including the registered capital, certificate of financial standing offered by banks, financial report as well as audit reports for the recent three years; (d) Report of experiences of cooperation with foreign enterprises or relevant certificates; (e) Clarification of coal-bed methane exploiting technology and capacity, including a list of technical equipment and certificates of employees; and (f) Other materials that need to be submitted. (3) Deadline for Application The competent commercial departments and development and reform commissions shall, in accordance with the requirements stated in the Circular, undertake a preliminary examination of the application materials upon submission by applicant enterprises and submit them to Ministry of Commerce and National Development and Reform Commission by November 31st at the latest. 3 The foreign enterprise as a collaborator shall satisfy the following requirements: (a) At least five years' experience of coal-bed methane prospecting and exploitation; (b) Internationally advanced technology of coal-bed methane prospecting and exploitation as well as technical people in command of it; (c) Management ability in organizing the prospecting and exploitation of coal-bed methane; and (d) Good financial standing and efficient capital. The foreign party's qualification shall be subject to the examination of the Ministry of Commerce. 4. Pilot enterprises shall develop foreign cooperation within the region designated by the State Council. Examination and approval procedures shall proceed in accordance with the current regulations concerned. 5. The collaboration parties shall conclude a contract. Until and unless otherwise stipulated by laws and regulations or agreed upon by contractual parties, the foreign enterprises that signed the contract (hereinafter referred to as foreign collaborators) shall provide the prospecting fund solely and independently and bear the risks; once coal-bed methane resources of commercial value are discovered, the exploitation work shall be undertaken by the foreign collaborators jointly with the Chinese pilot enterprise; the actual construction work in the course of prospecting and exploitation may be undertaken collaboratively by both parties or independently by one side, or by a third party by dint of contraction. 6. The foreign collaborators may, under the contract, reclaim their investment and expenses from the coal-bed methane produced and receive rewards. They may, in the light of relevant regulations by the State and agreements put in the contracts, transport their share of coal-bed methane produced abroad or directly sell it in China. If it is sold in China, the common practice requires the Chinese pilot enterprise purchase it or it be sold to a third party through enterprises established within the Chinese territory by foreign collaborators, without violating relevant regulations concerning coal-bed methane sales within the Chinese territory. Foreign collaborators may, under law, remit abroad the reclaimed investment, profits and other lawful incomes. 7. Other matters concerning the pilot program shall be administered and implemented in accordance with Regulations of the People's Republic of China on the Exploitation of Onshore Oil Resources in Cooperation with Foreign Parties (Order of the State Council, No. 317). 8. In areas that have been granted coal mining license, people with mining right may develop cooperation with foreign parties as far as surface drilling of coal-bed methane and down-hole reclamation in the course of coal mining are concerned. These two activities shall not be included in the special management scope of cooperation with foreign parties concerning coal-bed methane, but relevant laws and regulations in relation to foreign cooperation or foreign investment shall be strictly abided by. 9. Authoritative departments shall be responsible for administration and supervision work in the course of coal-bed methane prospecting and exploitation in cooperation with foreign collaborators and urge both parties to strictly carry out their work in accordance with the basic requirements concerning the minimum funding in prospecting and construction period regulated by the State. Ministry of Commerce
National Development and Reform Commission Ministry of Land and Resources October 17, 2007 |
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