CNPC's strategic direction started to change before the oil price crash of 2014. Rising costs and Chinese government scrutiny saw a move away from increasingly bold international expansion. Weak fundamentals and government pressure to improve the efficiency and transparency of state owned enterprises has seen further retrenchment over the last two years. But growth prospects have been damaged by deep cuts and production declines beyond 2018 are a very real risk without a recovery in investment. There are signs that CNPC is starting to re-engage in international business development and this could signal a more expansive approach in 2017, led by government-to-government initiatives. We also expect a return to international M&A but timescales are uncertain and could depend on a sustained period of higher oil prices.