It is the country's main importer of crude oil. In 1993, China became a net oil importer for the first time. China's strategy is to increase domestic oil and gas output by stabilizing production in eastern China's mature fields, by increasing the focus on exploration and development in the western regions and by continuing to encourage offshore development. Central to this strategy is an expansion of exploration and production joint ventures with foreign companies. Thus far, China has adopted a very limited form of privatization.
Most foreign activity is in production-sharing contracts.
In 1993, the need to meet production targets led China to open up onshore areas to foreign investors with the first of three investment auctions. Eastern China, the country's traditional producing region, is where most of the country's large oil and gas fields are located. China has recently emphasized exploration and development expenditures in western regions, particularly in the Xinjiang region of the northwest. Most onshore tracts offered to foreign investors in the three investment auctions are located in this area. The three major basins in the Xinjiang region are Tarim, Turpan-Hami, and Junggar.