|| China has to rely on imported oil to support its economic growth, since it has been suffered from the imbalance of oil supply and demand, low oil reserves, and high consumption of oil. This situation raises many strategic questions, for China, of energy security, such as where to get the oil, how to store more oil, and how to reduce the risk of imported oil transportation, etc. China made the “Oil Strategy of the 21st century” in 2002, which outlined the oil policies of “Diversification” and “Going Out,” to speed up the construction of oil storage facilities, establish more oil storage bases, encourage oil enterprises to conduct overseas investment and seek more cooperation with oil-rich countries.
According to the guidance of “Diversification” and “Going Out,” China built up oil and gas pipes with Russia, Kazakhstan, and Myanmar. By those pipe lines, oil and gas are distributed to the southeastern and northeastern parts of China, and by this way, China could avoid the risk of transporting by sea lanes. China also worked on setting up cooperation of oil exploration with Latin American and African countries, and offered financial support in return for long-term and stable oil supply. However, there are many difficulties for China in developing oil cooperation with other countries, including political risk of target countries, competition with other international companies, and so on. Furthermore, disordered management system, complicated application process also set obstacles to Chinese oil companies when doing overseas investment.
This paper is based on the analysis of Chinese oil strategies to figure out the main targets of overseas investment of Chinese oil companies with the shortage of domestic oil production, and the difficulties that Chinese oil companies encountered while conducting overseas investment under the violent international competition, and the concrete achievement of overseas investment of Chinese oil companies under the guidance of “Going out” policy.