China's increasing dependence on oil imports, the need for Chinese companies to develop technical expertise for their more challenging resources, and attempts to capture value upstream are key factors driving Chinese NOCs to invest in international projects and form strategic commercial partnerships with IOCs. Since 2008, the NOCs have purchased assets in the Middle East, North America, Latin America, Africa, and Asia and invested an estimated $73 billion in overseas oil and gas assets between 2011 and 2013, according to the International Energy Agency (IEA). Most of China's recent direct acquisitions were channeled to deepwater oil plays off the coast of West Africa and Brazil, natural gas and coalbed methane opportunities in Australia, and oil sands and shale gas projects in North America.

China's oil production from its overseas equity shares and acquisitions grew significantly over the past several years, from 1.36 million bbl/d in 2010 to an estimated 2.1 million bbl/d in 2013, according to the IEA. CNPC holds the most equity production and investment overseas of all the NOCs, although Sinopec, CNOOC, and other smaller NOCs and private companies have rapidly expanded their overseas investment profiles over the past five years. Chinese companies are participating in upstream activities in 42 countries, and half of the overseas oil production stems from the Middle East and Africa. Iraq is a key country where all three of the NOCs have invested in several large fields where they expect production to increase. About 26% of China's overseas oil production in 2013 was in Iraq.²⁷Kazakhstan, Sudan, and South Sudan are other countries that have contributed to sizeable portions of China's overseas production.

In the past few years, China has diversified its overseas upstream acquisitions to include new oil formations in Brazil and North America. Not only do these assets provide commercial opportunities, they allow the NOCs to gain technical expertise in challenging and unconventional plays. Although CNOOC contributed just small amounts to China's overseas hydrocarbon production for several years, the NOC has swiftly increased oil and gas purchases since 2010 in an attempt to gain technical expertise and acreage in shale oil, shale gas, and coalbed methane and deepwater hydrocarbon resources. Following approval from Canada, CNOOC purchased the Canadian oil company Nexen for $15.1 billion (plus $2.8 billion in Nexen's net debt) in 2013. This deal became China's largest overseas acquisition. CNPC, Sinopec, and Sinochem have purchased stakes in producing fields in Canada, the United States, and Brazil as well.

Chinese NOCs have also invested in overseas shale gas and tight gas formations to improve their technical capacities for developing these resources domestically and to secure gas supplies. As China rapidly expands its imports of liquefied natural gas (LNG), the NOCs are seeking supply contracts by purchasing stakes in the upstream developments and liquefaction terminals in the Asia-Pacific region, Canada, and the United States.

By the end of 2013, Chinese NOCs had secured bilateral oil-for-loan deals with several countries, amounting to almost $150 billion.²⁸ China provided loans to countries that need capital to extract energy reserves and build energy infrastructure in exchange for oil and gas imports at established prices. China extended oil-for-loan deals with Russia, Kazakhstan, Venezuela, Brazil, Ecuador, Bolivia, Angola, and Ghana and has had a gas-for-loan agreement with Turkmenistan over the past decade. Venezuela and China signed several deals for more than $45 billion in exchange for 600,000 bbl/d of crude oil and products. Based on China's trade data, Venezuela falls short of this amount, but the country's crude oil exports to China have ramped up markedly from four years ago and were 276,000 bbl/d in 2014. The recent low oil price environment is affecting Venezuela's upstream development and export capacity in the near term, and China provided another $5 million in 2015 for oil investment.²⁹ Several oil and gas deals have been signed with Russia in the past few years, including two loan-for-oil deals amounting to $50 million, signaling China's move to diversify its energy supply. Each of the deals includes 300,000 bbl/d of oil transported through the ESPO pipeline from Russia to China. CNPC and Russia's Rosneft formed a JV, where CNPC holds a 49% stake, to develop Russia's East Siberian oil fields, which are expected to help meet the export requirements of the deals.³⁰ These agreements signal the growing energy ties between the neighboring countries and China's interest in gaining more access to Russian oil.