BP and China National Petroleum Corporation (CNPC) signed a production sharing contract last Thursday for shale gas exploration, development and production at the Neijiang-Dazu block in China’s Sichuan Basin.
The signing was attended by BP Group CEO Bob Dudley and CNPC chairman Wang Yili.
The contract is BP’s first shale gas production sharing contract (PSC) in China and covers an area of about 932 miles.
CNPC will operate the project.
“We are pleased to reach this significant milestone as part of our strategic partnership with CNPC, building on our successful cooperation in and outside of China,” Dudley said.
The PSC is the first contract related to a framework agreement on strategic cooperation BP and CNPC signed last October during a vist to the UK by the President of the People’s Republic of China Xi Jinping.
The framework agreement also covers possible future fuel retailing ventures in China, exploration of oil and LNG trading opportunities globally and carbon emissions trading as well as sharing knowledge about low carbon energy and management practices.
“CNPC and BP’s existing cooperation covers various areas including retail business in China, overseas upstream exploration and development and international trading,” Wang said.
The latest edition of BP’s Energy Outlook expects that shale gas will account for a quarter of total global gas production by 2035.
China is expected become the world’s largest contributor to shale gas production growth during that same period.