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Business / Companies

BP and CNPC sign shale gas agreement

By Yang Ziman (chinadaily.com.cn) Updated: 2016-04-05 11:37

British Petroleum Group (BP) and China National Petroleum Corporation (CNPC) signed a production sharing contract (PSC) for shale gas exploration, development and production in China last week.

The contract is BP's first shale gas PSC in China. It covers an area of about 1,500 square kilometers in the Neijiang-Dazu block in Sichuan Basin in the central western region of China. CNPC will be the operator for this project.

"We are looking forward to working together with CNPC on technology, operational and subsurface techniques in unconventional resources," said Bob Dudley, chief executive of BP.

Dudley said that BP will bring its worldwide experience to its first unconventional gas project in onshore China with CNPC as China continues to be an important part of the company's portfolio.

This PSC is the first achievement from BP and CNPC's framework agreement on strategic cooperation signed last October during President Xi Jinping's visit to the UK.

In addition to unconventional resources, the framework agreement covers possible future fuel retailing ventures in China, exploration of oil and LNG trading opportunities globally, and carbon emissions trading as well as sharing of knowledge around low carbon energy and management practices.

"As a new strategic industry for China, the exploration, development and production of shale gas will significantly benefit China's energy mix in a long run," said Edward Yang, BP China President. "Through this PSC, BP once again clearly reaffirms our commitment to being one of China's preferred energy partners to support the country in developing cleaner energy for a greener future."

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