BP and CNPC sign contract for shale gas development in China

BP and China National Petroleum (CNPC) have signed a contract for shale gas exploration, development and production in the Neijiang-Dazu block in the Sichuan Basin, China.

The production sharing contract (PSC) covers an area of 1,500km² and CNPC will serve as operator for the project.

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

"We will bring our worldwide experience to our first unconventional gas project in onshore China with CNPC."

The agreement also covers possible future fuel retailing ventures in Chinaand exploration of oil and LNG trading opportunities globally, as well as carbon emissions trading.

CNPC chairman Wang Yilin said: "CNPC and BP’s existing cooperation covers various areas, including retail business in China, overseas upstream exploration and development and international trading.

"Building upon the framework agreement on strategic co-operation signed last year, this unconventional resource PSC is a manifestation of our deepening co-operation."

According to BP’s Energy Outlook 2016, shale gas will account for a quarter of the total gas produced globally by 2035.

Separately, BP and Kuwait Petroleum (KPC) signed an agreement to explore possible joint opportunities for investment and co-operation in future oil, gas and trading ventures.

The agreement improves oil and gas recovery from Kuwait’s existing resource base and also includes the intention to study opportunities for joint investment in future oil and gas exploration inside Kuwait and globally.

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Image: The agreement covers possible future fuel retailing ventures in China and exploration of oil and LNG trading opportunities globally. Photo: courtesy of by anankkml / FreeDigitalPhotos.net.