This is the fourth case study in our series titled Case Studies in PRC Foreign Tech Transfers that we launched on 18 December 2020. These case studies are based on foundational research we conducted a few years ago. We invite you to follow us on Twitter and on LinkedIn to stay up to date on our latest publications.

Jereh Group is a People’s Republic of China (PRC) oil and gas company specializing in oilfield services and equipment manufacturing. Jereh Group has established R&D centers and research partnerships with top North American universities and across the world to advance its own technological capabilities, violated U.S. Export Administration Regulations (EAR), and undermined Iran sanctions. Though a non-state-owned company, Jereh Group corporate announcements, statements, and considerable financial and R&D support from national and provincial level government entities reveal its connections to and role in implementing PRC Party-state directives.

Jereh’s activities in the United States have not only contributed to the company’s technological advances but also enabled Jereh Group to undermine U.S. foreign policy objectives. Jereh group’s Yantai Jereh Oilfield Services Group Co. and other subsidiaries as well as individuals were placed on the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) Entity List in March 2016 due to “reasonable cause to believe, based on specific and articulable facts, that they unlawfully diverted U.S.-origin oilfield equipment to Iran without the required Department of the Treasury, Office of Foreign Assets Control (OFAC) licenses, actions that violate the EAR.”

• Jereh Group in October 2020 reported that it spends no less than 4% of annual revenue on R&D. Jereh Group boasts eight R&D centers with more than 1200 professionals in Calgary, Canada, Houston, Texas, Yantai, Beijing, Chengdu, Tianjin, Shanghai, and Dezhou. The company also has strategic partnerships with more than 50 universities and research institutes across the globe.
• Jereh Group incorporated Jereh International Corp. on 16 January 2008 as a U.S. based manufacturing and R&D center. Jereh Group has R&D partnerships with the University of Houston and Canada’s University of Regina aimed at serving as platforms for “actively introducing advanced foreign technology and first-class engineering and technical personnel.”
• The Communist Party of China’s (CPC) “Shale Gas Development Plan (2011-2015)” specifically references North American shale gas technology advances as a model for development and use.

Jereh Group has effectively leveraged state financial support and resources to make significant advances in shale oil and gas equipment technology, thereby advancing CPC objectives in this regard. The CPC’s 13th Five-Year Plan calls for the PRC to consolidate oil and gas production cooperation in key countries and resource areas as well as to actively participate in international oil and gas infrastructure construction. Companies like Jereh Group play a key role in fulfilling these policy goals.

• Jereh Group’s corporate filings often include “industry policy support” sections detailing key central and provincial level policies to “vigorously support the development of shale gas equipment industry enterprises,” including the Energy Development 12th Five-Year Plan (2011-2015).
• State-owned Haitong Securities Limited and Yinhua Fund Management Co., whose shareholders include state-owned Beijing Capital Management Group, on January 2014 acquired Jereh Group shares through non-public issuances. Jereh Group in November 2016 set up the Shandong Blue Jereh Energy Investment Management Fund, an oil and gas industry fund with state backing.
• Listed on the Shenzhen Stock Exchange, the company currently operates in more than 50 countries and regions, as observed on their “About Us” page on 11 March 2021. Jereh Group corporate announcements, statements, and considerable financial and R&D support from national and provincial level government entities reveal its connections to and role in implementing Party-state directives.

Several Jereh Group subsidiaries have been recognized by the PRC’s Ministry of Industry and Information Technology (MIIT) as national-level leading industrial design companies. The MIIT is at the forefront of PRC strategic initiatives such as the Innovation Driven Development Strategy, the PRC’s keystone plan for boosting its status as a technological superpower through the identification and absorption of key foreign technology and know-how.

• MIIT in June 2015 selected Jereh Group’s subsidiary Yantai Jereh Petroleum Equipment & Technologies Co. as a “2015 Intelligent Manufacturing Special Project.”
• MIIT in January 2016 recognized Jereh Group Oil and Gas Development Equipment as a “state-level industrial design center”.