by Jiang Guocheng

    BEIJING, July 12 (Xinhuanet) -- China's three biggest oil companies are expanding their scopes of business in oil exploration in the country, breaking a de-facto monopoly over offshore oil prospecting and production.

    China's Ministry of Land and Resources, which oversees resources exploration in the country, issued a license on July 6 to PetroChina Company Ltd for offshore oil exploration in the country, a move described by experts as a landmark event, The Economic Observer reported on Monday.

    PetroChina, the country's biggest oil producer, has so far confined its oil-related activities to the land, although it is not legally bound.

    But experts acknowledged that the license is regarded as a landmark for the company, which would break the de-facto monopoly of China National Offshore Oil Corp. (CNOOC) over offshore oil prospecting and production.

    CNOOC which has been China's only major offshore oil exploring and producing firm, had also confined to its oil-related activities to offshore oil exploration and production, though it is not legally required to do so.

    Pan Xinchun, deputy director of the National Bureau of Oceanography under the ministry, was quoted by the newspaper as confirming the report on July 8.

    Experts say PetroChina's expansion of its scope of business to offshore oil exploration and production was a move to prop up its oil output.

    PetroChina, who also operates China's biggest oil field Daqing Oilfield, has found itself in a difficult position as oil output from Daqing is decreasing after decades of oil extracting. Daqing Oilfield in northeast China accounts for 40 percent of the company's total output.

    CNOOC, meanwhile, has recently struck a deal with the Inner Mongolia Autonomous Regional government on the CNOOC'S taking overof the Tianye Chemical Group, whose predecessor is Inner Mongolia Chemical Fertilizer, whose assets totaled some 4 billion yuan (nearly 500 million US dollars), according to the report.

    The report noted that CNOOC may intend to be involved in miningthe country's biggest natural gas field, which has been mined by the Changqing Oilfield under PetroChina, and extract oil.

    Sinopec, the country's biggest oil refining and petrochemical company, is also submitting an application for offshore oil exploration and production in South China Sea, East Sea China and Bohai Sea, according to the newspaper report.

    Experts say the expansion of business of the three oil and petrochemical giants was market driven, and the move is what the Chinese central government hoped for in a bid to improve efficiency and increase competition between the three giants, all State-owned, for increased oil output to power the country's rapidly growing economy.

    China has become a net oil importer in the past decade, importing 91.12 million tons of crude and 28.24 million tons of refined oil in 2003, and experts estimated China's crude oil imports might exceed 100 million tons this year. Enditem