Investments in oil and gas will increase in China over the next several years, said Recon Technology, China’s first non-state oil and gas field services company to be listed on Nasdaq.
In particular, Recon Technology projects that capitalized expenditures and development and production activities of oil companies will become more active next year due to rising oil prices.
The company provides specialized oilfield equipment, automation systems, tools, chemicals and field services to oil companies primarily in the People’s Republic of China.
In arguing its perspective, Recon Technology said that the National Energy Administration of China organized a meeting in July 2021 to promote the work of vigorously improving the exploration and development of oil and gas throughout 2021, and emphasized that it would continue to improve. oil and gas exploration, development and investment.
Also at a meeting of China’s National Energy Commission in October 2021, he proposed increasing oil and gas exploration and development.
For example, PetroChina, a major customer, predicted that its annual capital spending in 2021 will be 239 billion yuan; However, its semi-annual report revealed data showing that in the first half of 2021, PetroChina’s capex was only 73.883 million yuan.
Investments in oil and gas
Recon Technology expects PetroChina’s spending on exploration and development to be released gradually in the second half of the year, especially spending on development and production capitalization will occupy an important component.
In addition, the company expects its oilfield equipment section, especially electric submersible screw pumps and other businesses, to present good development opportunities.
Also, as prices and development activities of oil companies increase, so will the production of oily wastewater and sludge.
Revenue from its environmental protection segment, which comes primarily from treating such wastes, will also benefit from the trend.
Chinese laws and regulations currently do not prohibit or restrict foreign ownership in oil businesses. However, Chinese laws and regulations prevent foreign direct investment in certain industries
