Chinese investors need to be well equipped for drilling through layers of legal and business uncertainty to reap rewards from less conventional projects, writes Richard Li
Fundamental changes are occurring in China-related mining and energy markets, whether domestic or overseas.
On the outbound side, Chinese national mining and energy companies are digging deeper under the earth and sea. Not satisfied with using their wealth to acquire conventional assets, they have the confidence to take up the unconventional challenges of exploring for resources like shale gas and deep-water oil.
But uncertainties and even dangers buried in the global mining and energy market may await Chinese explorers who drill too deep for resources.
“Each project we handle has its own specific and unique challenges, depending on the jurisdiction in which the assets are located, the political atmosphere towards foreign investment from China, and the transaction structure,” says Xiao Yong, head of China practice at Vinson & Elkins in Hong Kong.